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It is now recognized that environmental and taxation policies can be made not only compatible but also mutually reinforcing. Their potential for achieving environmental goals and improving economic efficiency is also well accepted. In fact, environmental taxes are increasingly used or envisaged in a number of countries. Neverthe less, a number of political, technical, economic and social issues must be solved for a successful implementation of ecotaxes: How to design ecotaxes? What are their possible impacts on income distribution and on intenrational trade and how to tackle these issues? Wat are the options for using ecotax revenue? Drawing from the experience of OECD countries, this report reviews these issues and concludes with a set of considerations to be considered for a successful implementation of ecotaxes.
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