Abstract
This paper provides an overview ofs the use of environmentally related levies and other economic instruments in air quality and climate change policies in Central and Eastern European EU countries. It is shown demonstrated that their overall effectiveness and efficiency is quite low and they help to secure revenues for dedicated environmental funds only.
We pay a special attention to the implementation of EC Directive 2003/96/EC Directive on in the Czech Republic that presents provides the a unique example of a revenue-neutral environmental tax reform that has actually introducedbeen implemented. By uUsing a micro-simulation model, we assessed the distributional effects of this reform and found small effects both on households and the environment