This chapter examines how environment is being mainstreamed into Colombia’s economic and sectoral policies. It examines the use of tax policy to pursue environmental objectives, and progress in removing fiscal incentives that can encourage environmentally harmful activities. The chapter also looks at other economic instruments to implement the polluter-pays and user-pays principles and to recover the cost of providing environmental services such as water and waste management. It includes a discussion of public and private investment in environment-related services and infrastructure. Colombia’s innovation performance, including on environment, is also assessed.