Executive summary -- Busy readers' guide to this publication -- Pt.1. The political economy of environmental fiscal reform (EFR): overview of key issues: 1. Environmental fiscal reforms and poverty reduction -- 2. The instruments of EFR -- 3. Designing reforms - the politics of making trade-offs. From policy formulation to actual implementation -- 4. Conclusions and recommendations for donors -- Pt. 2. Environmental fiscal reforms: political challenges and opportunities in selected sectors: 5. EFR in the commercial-scale forestry sector -- 6. EFR in the commercial fisheries sector -- 7. EFR in the fossil fuel sector -- 8. EFR in the electricity sector -- 9. Drinking water -- 10. Fiscal measures for industrial pollution control -- References -- List of tables -- List of figures -- List of boxes.

This DAC Reference Paper outlines key issues faced when designing Environmental Fiscal Reform (EFR). EFR refers to a range of taxation and pricing measures which can raise fiscal revenues while furthering environmental goals. The objective is to provide insights and "good practice" on how development co-operation agencies can help developing countries take advantage of EFR approaches in both their development and poverty reduction strategies.