Climate change is a critical issue of our days. In an effort to tackle climate change, Europe has set ambitious targets and policy designs. A significant aspect of EU’s strategy for the mitigation of climate change is the implementation of environmental taxation and environmental tax reforms, in order to correct externalities and to influence a change of economic agents’ behaviors towards polluting products and activities. Green taxes have a dual purpose, to protect the environment and social welfare and to raise revenues for the governments, as any tax. Under this prism, environmental tax reform could be enforced in a revenue-neutral scheme, where the increase of taxes levied on polluting activities or on excessive resource use could offset the reduction in income, labor taxes and social contributions. In the first part of this thesis, the emphasis is given in the theory of environmental taxation and ETR, as well as the current status of environmental tax revenue in Europe. The second part comprises of a statistical analysis of CO2 emissions and environmental tax revenues in terms of GDP, of six EU countries. Then, an econometric approach follows, testing the causal relation between the two variables.