The Role of Fiscal Instruments in Environmental Policy
CESifo, Munich, 2009
CESifo Working Paper No. 2719
![](https://cesifo.org/DocImg/cesifo1_wp2719.jpg?c=1689236936)
Environmental protection is one of Europe's key values. The EU has set clear policy objectives to achieve its environmental goals. The EU has favoured market-based instruments, among which fiscal instruments to tackle the climate change problem. This paper takes a policy-making perspective and provides an overview of key issues on the role of fiscal instruments in energy and environmental policies. It describes fiscal instruments as cost-effective means to promote environmental goals and highlights in which cases taxes and other types of fiscal instruments can usefully complement each other to achieve environmental target.