Como compensar e incentivar os municípios a proteger e conservar o meio ambiente? O caso do ICMS Ecológico em Minas Gerais

The ecological ICMS was first used to distribute a share of the ICMS revenue in the state of Parana in 1991. This pioneer experience originated from counties’ claims which argued that their economies were harmed by land use restrictions, mainly because they were watershed protection areas or their territory was part of a conservation unit. Responding to these claims, the state government changed the ICMS allocation criteria, favoring those counties with added funds. In the Minas Gerais State, the Ecological ICMS was implemented in 1995 with the “Robin Hood Law”. The objective of this study was to evaluate the Ecological ICMS in Minas Gerais as an instrument for compensation and incentive. Results showed the creation of a conservation unit would compensate most of Minas Gerais counties because of the Ecological ICMS, although the attractiveness of the conservation option has been declining systematically over the years. Regarding the incentive effect of the Ecological ICMS, results showed that the Ecological ICMS really compensates and incentives Minas Gerais counties to preserve the environment because there is a direct relationship between the amount received from Ecological ICMS and the growth of protected areas in Minas Gerais counties.

Variant title:
How to encourage local governments to engage in conservation actions? The case of the Ecological ICMS in Brazil
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Publication Type:
Working or Discussion Paper
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Series Statement:
Working Papers in Applied Economics
WP - 2009/06

 Record created 2017-04-01, last modified 2017-08-25

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