Environmental taxes are receiving growing interest world-wide. From an environmental perspective, a key driver has been the search for more efficient and cost-effective approaches for implementing domestic environmental policies. From a fiscal policy perspective, growing pressures have been exerted to reduce income tax rates and to offset this by broadening the tax base. These reforms provide opportunities to introduce new environmental taxes in a revenue-neutral manner and simultaneously to achieve environmental and fiscal policy objectives.

This volume presents recent developments in designing and implementing environmental taxes in China and OECD countries. Key challenges and opportunities are highlighted, including the role of removing or reforming existing distortionary subsidies that are damaging to the environment; restructuring existing taxes; and introducing new environmental taxes. The papers, which were presented at an OECD Workshop held in October 1998, provide the reader with a unique comparative analysis.