Germany has developed a range of environmental policies that support green growth. The use of economic instruments has been extended to improve pricing of environmental externalities and complement traditionally strict environmental regulations. This chapter examines Germany’s use of taxation policy to pursue environmental objectives and progress in removing fiscal incentives that can encourage environmentally harmful activities. Opportunities to further green fiscal policy are also assessed. The chapter also looks at other pricing mechanisms to implement the polluter-pays and user-pays principles and to recover the cost of providing environmental services. This includes a discussion of public and private investment in environment-related infrastructure. The growth of an internationally competitive environmental goods and services sector is examined along with its potential to serve as a source of economic growth and jobs. Finally, the chapter reviews the international dimensions of Germany’s environmental policy, with a focus on mainstreaming the environment in development co-operation programmes.