Ecological ICMS (ICMS-E) and Expenditure on Environmental Management and Sanitation Functions in the Context of The Cerrado Biome: an Exploratory Analysis with Municipalities of the State of Mato Grosso do Sul

Objective: The objective of this work was to verify the correlation of the amount of transfers of ICMS-e with the expenses in the environmental management and sanitation functions of the municipalities with a Cerrado area greater than 50%. Theoretical Framework: The creation of the ecological ICMS as financial compensation for municipalities that have a majority of their territory occupied by environmental conservation areas. Method: The sample used is composed of 47 municipalities in the state of Mato Grosso do Sul. The transfer data of the ICMS-e were obtained through contact via institutional email with those responsible for the Management of Conservation Units (GUC) of the Environment Institute of Mato Grosso do Sul (IMASUL). Municipal expenditure data for the environmental management and sanitation functions were obtained from the website of the National Treasury Secretariat (STN) through the Finances of Brazil (FINBRA) application. The time frame of the data was from 2002 to 2012. Pearson's correlation analysis was applied at a significance level of 5% (p <0.05). Results and Discussion: The results show that the relationship between the variables: annual total of transfers of ICMS-e (TAR_ICMS-e) and the annual total of expenditures in the environmental management function (TA_GestAmb) is positive and statistically significant (r = 0.872 and p = 0.000). Research Implications: Given the above, it appears that the strength of the correlation coefficient is strong. Pearson's r coefficient also provides the degree of joint variation of these variables and, therefore, it is estimated that 76% of the investment in TA_GestAmb is a reflection of the transfer received from TAR_ICMS-e. Originality/Value: Regarding the variable: total annual expenditure on the sanitation function (TA_San), the result shows a positive and not statistically significant correlation (r = 0.093 and p = 0.785), however, the effect is practically null.