This paper proposes an analytical framework for assessing policies that will contribute to a better integration of environmental externalities in the pursuit of economic efficiency and growth objectives. The framework consists of two parts. The first part lays out principles and criteria for the identification and selection of policies that will benefit both income and the environment or that will boost income at the
least cost in terms of the environment (and vice-versa). The second part focuses more on issues of structural adjustment related to the transition towards a greener economy.