Governing the Low-Carbon Transition: Institutional Coordination, Environmental Taxation and the Conditions for Sustainable Economic Development

Climate change increasingly requires policy frameworks capable of combining environmental effectiveness, economic adjustment and social sustainability. This paper examines the relationships between climate governance, environmental taxation and sustainable economic development through a structured review of recent contributions on institutional coordination, carbon pricing and the low-carbon transition. The literature shows that climate governance has progressively moved beyond exclusively state-centred arrangements toward polycentric systems involving national authorities, cities, firms, investors and civil-society organizations. At the same time, environmental taxation and emissions-trading mechanisms have become central instruments for influencing emissions, technological choices and investment decisions. Their effectiveness nevertheless depends on policy coverage, institutional credibility, revenue recycling and complementary measures. The reviewed contributions also demonstrate that sustainable economic development cannot be reduced to the compatibility between economic growth and declining emissions. Green innovation, renewable energy, infrastructure investment, sustainable finance and fiscal reform must be accompanied by attention to distributional consequences, employment adjustment and territorial inequalities. The paper therefore argues that climate governance and environmental taxation are most effective when incorporated into a coherent development strategy combining regulatory coordination, fiscal instruments, technological transformation, financial mobilization and just-transition policies. Sustainable decarbonization ultimately depends on the capacity of public institutions to connect environmental objectives with economic opportunities and socially acceptable mechanisms of structural adjustment.