Economic instruments provide important market signals that can influence the behaviour of producers and consumers. They can incorporate environmental costs and benefits into the budgets of firms and households, by increasing (or decreasing) the price of a product or service. They can be an effective and cost-efficient way to achieve environmental goals, such as conserving and sustainably using biodiversity, fighting air pollution and mitigating climate change.

Environmentally related taxes increase the cost of polluting products or activities and, as a consequence, discourage their production and consumption, regardless of whether this was the intended purpose of the tax or not. A tax is a payment made to general governments that is normally not in proportion to the services provided in return.

The indicator measures the number of countries using biodiversity-relevant taxes.

Brief background/history of development

The OECD started developing the database on Policy Instruments for the Environment (PINE) in the 1980’s and the database has gradually been expanding over time as more countries provide information. Today, the OECD PINE database includes information on six types of policy instruments relevant to the environment and natural resource management in 109 countries. The database contains more than 3 500 instruments, of which more than 2 800 are in force. Each instrument in the PINE database is tagged with one or more of the environmental domains it aims to address: air pollution, biodiversity (covering terrestrial, marine/ocean and aquatic ecosystems), oceans, climate change, land management, transport, water pollution, etc.