Environmental taxation and state aid

Faced with major environmental challenges the use of economic incentives is developing in the European Union to achieve a high level of environmental protection. Environmental policies must be effective in reconciling environmental objectives while reducing the costs of this effort for society. Environmental taxation and permit markets are the main forms of instruments already in place in the European Union and in several OECD countries. However the use of these instruments is not without limits. Economic policies based on the positive concept of encouraging certain behaviors encounter a major legal obstacle. This is harmful tax competition and the problem of state aid.