Toward a Greener Future: Establishing a Green Fund for Kosovo

Environmental taxation is an important fiscal tool used by governments to generate revenue aimed at mitigating environmental impacts and promoting sustainability. In Kosovo, these taxes constitute a significant revenue stream. However, there is a clear discrepancy between the revenue collected and the amount allocated to environmental protection. Kosovo collects substantial revenue from environmental taxes, estimated at approximately 2.3% of GDP, yet allocates less than 2% of these funds toward environmental protection. This gap undermines the effectiveness and public credibility of green taxation, while urgent challenges such as air pollution, inefficient waste systems, and climate vulnerability remain underfunded.

This policy brief advocates for the establishment of a Green Fund for Kosovo, a dedicated, transparent financing mechanism that would reinvest a meaningful share of environmental tax revenues into strategic sustainability initiatives. Modeled on regional best practices such as Slovenia’s Eko Sklad, the proposed Green Fund would support investments in renewable energy, energy efficiency, air quality, biodiversity, and circular economy. The fund would serve as a tool to improve fiscal governance, build public trust, mobilize international co-financing, and ensure Kosovo’s alignment with the EU Green Agenda. By linking revenue collection with targeted green spending, Kosovo can accelerate its environmental transition, stimulate inclusive green jobs, and contribute to long-term economic resilience.