'Environmental taxation can spur innovation.' This simple, compelling message was a central finding of a recent OECD study of taxation, innovation and the environment (OECD, 2010). It is an insight of profound importance. Environmental policy instruments are frequently characterised as obstacles...

In a series of reports on environmental tax reform (ETR), published in 2005, the EEA defined ETR as 'reform of the national tax system where there is a shift of the burden of taxes, for example on labour, to environmentally damaging activities, such as resource use or pollution'. At the most...