By communicating their intention to link up environmental and social issues, policymakers can thus enhance the feasibility of implementing environmental taxation. In many such cases, the cost of direct regulation would simply be prohibitive (Mirlees et al., Typically, environmental taxes will create a dynamic incentive for environmental improvement. Responses are not always predictable, however, and if elasticity of demand is lower than predicted, specifically if people do not respond to an increase in price by changing their behaviour, environmental effectiveness may be compromised.