Greening Lithuania’s growth
This paper provides an overview on Lithuania’s environment and environmental policy.
Environmental performance has improved since the mid-2000s. Greenhouse gas emissions
declined and decoupled from growth over the past decade, yet per capita emissions
increased. Transport and energy are the main sources of emissions and pollution, followed
by agriculture and industry. There was much improvement in waste management practices,
with a significant reduction of landfills. Yet Lithuania has the highest mortality
rate from exposure to air pollution in the OECD. Energy efficiency is a concern, particularly
in the housing sector. Pricing of environmentally damaging activities is low. Lithuania
sets no CO2 tax, has one of the lowest excise duties on motor fuel, petrol and diesel
in the OECD, and has one of the largest ‘diesel differentials’, the gap in the price
of diesel versus gasoline. It also provides among the highest subsidies to fossil
fuels. In 2020, the country introduced a purchase tax for passenger vehicles which
takes into account emissions. Against this background, the country has scope for increasing
fossil fuel taxes and removing subsidies, to reach its ambitious environmental and
climate management objectives and the net-zero carbon emission target by 2050.
Published on April 26, 2021
In series:OECD Economics Department Working Papersview more titles