Part of Iceland’s response to the 2007-09 economic and financial crisis has been an increased emphasis on green growth. This chapter examines the use of taxes and other pricing instruments to pursue environmental objectives and to reduce the impact of production and consumption on the environment. The removal of environmentally harmful subsidies, such as to agriculture and fossil fuels, is also discussed. The chapter examines the public and private investment in environment-related infrastructure and services, as well as the promotion of “green” goods and services and eco-innovation. Finally, Iceland’s efforts to mainstream the environment in development co-operation programmes are reviewed.