Ecofiscal Policy

Ecofiscal policy uses financial tools like taxes and charges to encourage environmentally friendly behaviors and discourage harmful practices. By applying levies on activities that harm the environment—such as carbon emissions or pollution—it incentivizes businesses and individuals to reduce their ecological impact. The revenue generated can be reinvested in sustainable projects or offsets. Essentially, ecofiscal policy aligns economic incentives with environmental goals, promoting a sustainable use of resources while supporting economic stability and growth.