Efficiency of the EU Environmental Policy in Struggling with Fine Particulate Matter (PM2.5): How Agriculture Makes a Difference?

Abstract

Fine particulate matter (PM2.5) emissions are an important global issue as air pollutants lead to approximately 7 million deaths per year (World Health Organization). In an attempt to combat this global threat, countries in the European Union (EU) allocate relatively large funds for environmental policies. The main goal of this paper is to assess the long-term efficiency of the EU countries’ environmental policy in reducing the pressure of particulates pollution on the natural environment. For this purpose, multilevel panel regression models based on seminal within–between specification are used. The models are run for a panel of 25 EU countries for the years 2004–2016. In the investigations, we tried to capture the effect of the share of utilized agricultural area (UAA) in non-urban areas of the analyzed countries, as it may potentially influence policy efficiency. It was found that environmental spending in all main categories (pollution abatement, biodiversity, R&D, and environmental protection) had a significant impact on decreasing pollution pressure; however, the policy was more efficient in countries which had a lower share of UAA in their non-urban areas. The study emphasized that the impact of “pollution abatement” expenditure may be underestimated in basic panel models.