Greening Growth in Luxembourg

With strong economic growth overall and an increasingly important role as a regional economiccentre, Luxembourg is experiencing mounting environmental pressures. This is mainly a result of agrowing population and a rapid increase in transport, which is dominated by the car, as the number ofworkers commuting within Luxembourg and from across the border has risen rapidly. Ensuingenvironmental pressures are sizable, including through CO2 emissions, air pollution and land use changes.Large-scale commuting, combined with low fuel taxes compared to neighbouring countries, has entailedrapid increases in greenhouse gas emissions, which are higher in Luxembourg in per capita terms thanalmost anywhere else in the OECD. Sound housing policies, urban and transport planning to limit urbansprawl and to promote public transport, and measures to better internalise environmental externalities willbe needed to ensure that Luxembourg’s economic growth is compatible with environmental and economicsustainability and the well-being of its population. This working paper relates to the 2012 OECDEconomic Survey of Luxembourg (www.oecd.org/eco/surveys/Luxembourg).