Spending by national governments on environmental protection began in the late 19th and early 20th centuries when concerns about public health and land conservation produced the first sanitation systems, national parks, and early regulatory agencies. But extensive environmental concern by governments began in the post–World War II era when rapid economic and population growth powered by fossil fuels led to widespread pollution and ecosystem degradation.
Rising public concern about pollution and ecological decline—fueled by events such as oil spills, air pollution emergencies, species extinction, and the publication of Silent Spring (1962)—led many governments to institutionalize environmental protection. Early movers included Japan’s Basic Law for Environmental Pollution Control (1967), the United States Endangered Species Act (1973), and Germany’s Federal Environment Agency (1974).
The International Monetary Fund (IMF) maintains a database on spending by national governments on environmental protection that dates to the mid-1990s for several dozen countries.1 Expenditures are categorized as follows: waste management, wastewater management, pollution abatement, protection of biodiversity, R&D on environmental protection, and environmental protection “not elsewhere classified.”
In the EU expenditure on environmental protection ranged between 0.2% of GDP and 1.5% of GDP in 2023. The total expenditure was €142 billion (0.8% of GDP) in 2023. Greece and the Netherlands devoted the highest ratio of GDP to environmental protection (both 1.5% of GDP), followed by Malta and Belgium (both 1.2% of GDP) and Luxembourg (1.1% of GDP). The expenditure on research and development (R&D) related to environmental protection was very low in all EU countries in 2023 (0.1% of GDP or less).2
Countries exhibit very different priorities in speeding for environmental protections. Kenya and South Africa prioritize biodiversity conservation. Both countries have tremendous biodiversity that is very valuable to their economies, especially tourism based on natural attractions. Both countries have numerous national policies, legislation, regulations, and guidelines for governing biodiversity conservation and management.
Hong Kong and Japan emphasize waste management and wastewater management because they face geographic and space constraints. Hong Kong is densely populated with limited space for waste disposal. Japan also has a relatively high population density and its mountainous terrain limits the space for landfills. Both countries have historical pollution problems, including waste incineration plants, illegal waste dumping, improper waste treatment, and wastewater leaks from landfills.
This system for classifying environmental expenditures is consistent with historic income accounting practices, but it is not a recording of the entire set of expenditures made by governments. Expenditures that protect the environment may appear as small items in the much larger budgets of administrative units with different functions. These expenditures of the government have environmental protection as a secondary purpose. For example, a transportation unit may study the most effective way to expand electric vehicle infrastructure, and an agricultural unit may investigate organic agriculture. Such expenditures would not show up in the current accounting system.3
1 International Monetary Fund, 2022, “Climate Change Indicators Dashboard. Environmental Protection Expenditures, accessed April 20, 2025, https://climatedata.imf.org/pages/access-data.
2 Eurostat, “Government expenditure on environmental protection,” accessed April 20, 2025, https://tinyurl.com/3hm4x39w
3 Alessandra Alfieri and Julian Chow, “Is a revision of COFOG needed to better address the need for better environmental expenditure data? United Nations Statistics Division, 27 October 2022, https://tinyurl.com/2k9nsjrp
