Environmental taxes should play an important part in environmental policy as they help to internalize externalities, reduce damage, and increase the quality of life; besides they allow raising revenue for national and local governments. Th e aim of this paper is to evaluate environmental eff ectiveness, economic effi ciency, equity impact, administrative feasibility and cost, and political acceptability of environmental (energy, transport, and natural-resource) taxes in Latvia. Th e study is based on desk research. Th e results demonstrate little evidence that existing environmental taxes lead to a signifi cant reduction in environmental pollution and waste fl ows, but they have a signifi cant fi scal eff ect. Most of the environmental taxes in Latvia apply direct and indirect subsidies, but most of the revenue comes from taxes on energy and transport. Environmental tax rates in Latvia are the result of political compromise and are not backed by the research on environmental costs of the particular activity. Th is paper fi lls the gap in environmental policy evaluation by looking at the performance and eff ectiveness of environmental taxes in Latvia.