Chapter 4 examines the road transport sector in Luxembourg, and its relationship to local air pollution and emissions of fine particulates (PM2.5), nitrogen oxides (NOx) and carbon monoxide. It pays particular attention to the implications of tax policies on emissions from land transport by non‑residents.In addition to analysing emissions of PM2.5 from transport, Chapter 4 examines the impact of emissions from the housing sector, as well as the costs to society of air pollution. It highlights findings of a special campaign of the Climate Pact to measure NO2 concentrations through 100 stations established in 36 municipalities. Luxembourg’s effort to update its strategy for sustainable mobility (Modu 2.0) is examined, as well as steps taken to promote car-pooling, public transport and active mobility, low-emission vehicle use, rail transport and teleworking. Chapter 4 ends with a discussion of tax competition between sub-national authorities and fiscal threats from promotion of sustainable mobility abroad.

Chapter 5 describes the main trends concerning biological diversity and natural habitats in Luxembourg, and the related policy objectives. It examines the country’s progress over the past 15 years and the main challenges that need to be addressed. It covers such areas as species at risk, habitat, climate change, ecosystem services and protected areas.Chapter 5 also examines institutional co-operation and governance, as well as instruments to protect natural areas and threatened species. It highlights the need for accelerating policy action and better integrating biodiversity issues into sectoral policies, as well as Luxembourg’s contribution to the protection of regional and international biodiversity.