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G. waste water treatment plants) or to fund “generic” research and development which benefit the whole industry. Revenue recycling is an effective way to increase the acceptability of reform by industries. In China, for example, a combination of pollution taxes and support for pollution abatement expenditures has proved effective. Effective use of recycled funds requires a system for rigorous cost-benefit assessment, to ensure that the most cost-effective pollution control investments receive support.
2. THE INSTRUMENTS OF EFR E nvironmental fiscal reform covers a broad range of instruments that deal with sustainable use of natural resources and the control of harmful pollution. In general, an EFR measure is not implemented in isolation but as part of a package including notably complementary regulatory measures. Here we review the various instruments of EFR and some of their main uses and features. The focus is on instruments which can be used to both raise revenue and improve environmental management.
This requires accurate information presented in a way that is easy to understand. Dialogue between key stakeholders will also generate additional information on stakeholders’ perspectives. Consultations and dialogues with key stakeholders in the policy development process (outlined above) will also help generate support for the policy. Dialogue can also help to form political alliances and get political majorities where legislation is required. However, it should not be assumed that dialogue will lead to consensus, and choices between different interests will often remain.
Environmental Fiscal Reform for Poverty Reduction by Oecd