The term environmental fiscal reform (EFR) means different things to different people. In this report, we will take EFR to mean: a range of taxation or pricing instruments that can raise revenue, while simultaneously furthering environmental goals. This is achieved by providing economic incentives to correct market failure in the management of natural resources and the control of pollution. By encouraging more sustainable use of natural resources, such as forests and fisheries, and by providing incentives to reduce pollution from energy use and industrial activities, EFR also addresses environmental problems that make a difference to the livelihoods of the poor. Overall, the report seeks to identify the fiscal, environmental and poverty reduction opportunities that EFR presents policy-makers. These are seen in relation to specific sectors and countries, the likely obstacles to pursuing these opportunities, and how these obstacles are most effectively managed.