COMPARATIVE ASSESSMENT OF EXTERNAL COSTS AND POLLUTION TAXES IN BALTIC STATES, CZECH REPUBLIC AND SLOVAKIA

External costs are the main market failure. Pollution taxes and other flexible market instruments are applied to internalise external costs of atmospheric emissions. Subsidies to renewable energy technologies in the form of Feed-in prices are also applied to internalize positive external benefits associated with use of renewable energy sources for energy generation as these technologies have lower life-cycle emissions of classical pollutants and GHG emissions in comparison with fossil fuel based energy generation technologies. The paper reviews and compares external costs of atmospheric pollution and pollution taxes in Baltic States, Czech Republic and Slovakia and assesses the level of internalization of external costs and their impact on atmospheric emissions of classical pollutants in these countries. The literature review allows generalizing results of external costs assessment and their internalization issues. The paper analyses and compares external costs of atmospheric pollution in Baltic States, Czech Republic and Slovakia together with atmospheric pollution taxes and other policy measures used to internalise external costs of atmospheric pollution in Baltic States and Czech Republic and Slovakia. The analysis of trends of atmospheric pollution by classical pollutants in Baltic States and Czech Republic and Slovakia is provided and policy recommendations based on the main findings of analysis conducted were developed.