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This paper's purpose is to fill the lacuna found in the literature with regard to describing the role of EFTs for water conservation policies. The literature tells us that ecological fiscal transfers (EFTs) are analysed so to pursue biodiversity conservation policies and solid waste management (SWM). For biodiversity conservation policies, EFTs have two purposes: (1) to incentivize municipalities to create local protected areas (PA); and (2) to compensate municipalities for corresponding land-use restrictions. In the case of SWM, the main idea is that, even considering the fees paid by the households, it is still costly to maintain waste services in the municipal territories. In this context, EFTs are appealing policy instrument to help local governments create landfills or composting plants. However, in Brazil EFTs are functioning as a policy instrument which also includes a wide range of policy domains, such as water conservation, indigenous land, fire-control, and so on. Six states adopted EFTs specifically for water conservation policies: Goiás, Paraná, Pernambuco, Piauí, Rio de Janeiro, and Tocantins. Descriptive analyses, focusing on legislative differences are conducted for each of these states.

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This dataset was collected in the state government of Minas Gerais, Brazil (Instituto Estadual de Florestas), regulatory deliberation 86/2005 of the state of Minas Gerais, law 12040/1995 of the state of Minas Gerais, law 18030/2009 of the state of Minas Gerais, Brazilian law 9985/2000, and some laws/decrees that created municipal protected areas. The data was used to analyze the influence of the ecological fiscal transfers (EFT) in the policy-making process of adopting protected areas by municipal governments in the state of Minas Gerais. It has the potential to be reused in other studies to analyze the EFT at the local level. The related research article that uses this database was published under the title “Ecological Fiscal Transfers for Biodiversity Conservation Policy: A Transaction Costs Analysis of Minas Gerais, Brazil” [1].

Services-ICMS Environmental, an economic instrument toward this purpose, it is expected that the City is encouraged to improve their environmental policies, promoting the creation of protected areas and systems of adequate treatment and disposal of solid waste. In this sense, to assess whether this instrument is achieving these goals is to draw up a semi-structured questionnaire, addressed to the Head of Information Division Municipal Camaragibe, an interview was conducted with the responsible for the calculations of the ICMS Environmental Secretary of the State of Pernambuco, and analysis were made of funds received from the Environmental ICMS in the period between 2005 and 2006, comparing them with spending on environmental management function. At the end it was observed that this instrument is not encouraging to significantly Camaragibe to seek solutions to the problems, recommending the adoption of qualitative assessments for the criterion of "protected areas" and include this feature in the Municipal Fund Environment.