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Andersen, M.S., 1991. Green Taxes and Regulatory Reform: Dutch and Danish Experiences in Curbing with Surface Water Pollution. Berlin: Wissenschaftzsentrum Berlin für Sozialforschung (WZB). 36p.
Aylward, B., Bishop, J., & Barbier, E.B., 1991. Guidelines for Applying Environmental Economics in Developing Countries. Gatekeeper Series No. LEEC 91-02. London: International Institute for Environment and Development (IIED).
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Baker, M., Kemball-Cook, D. , & Mattingly, C., 1991. The Green Budget. London: Green Print. 120p.
Baldock, D., & Bennet, G., 1991. AGRICULTURE: A Study of Six EC Countries. London: Institute for European Environmental Policy (IEEP). 231p.
Barbier, E.B:
Barbier, E.B. ., 1992. The Nature of Economic Instruments: A Brief Overview. Gatekeeper Series No. GK 29-02. London: International Institute for Environment and Development (IIED). 9p
Barbier, E.B., Pearce, D., & Markandya, A., 1989. Blueprint for a Green Economy. London: Earthscan Publications Ltd. 192p.
Barbier, E.B., Pearce, D., Markandya, A., Barret, S., Turner, K., & Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Barbier, E.B., Bishop, J., & Aylward, B., 1991. Guidelines for Applying Environmental Economics in Developing Countries. Gatekeeper Series No. LEEC 91-02. London: International Institute for Environment and Development (IIED).
Barker, T., Baylis, S., & Madsen, P., 1993. A UK Carbon/Energy Tax: The Macroeconomic effects, Energy Policy March 1993 pp. 296-308. (Four scenarios (which vary the assumptions about revenue recycling and international competitiveness) are developed in order to determine how a carbon/energy tax may be implemented in the UK.)
Barret, S., Barbier, E.B., Pearce, D., Markandya, A., Turner, K., & Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Barthold, T.A., 1994. Issues in the Design of Environmental Excise Taxes, Journal of Economic Perspectives 8 (1) pp. 133-151.
Baumol, W.J., & Oates, W.E., 1992. The use of Standards and Prices for Protection of the Environment, in Markandya, A., & Richardson, J., (eds.) 1992. The Earthscan Reader in Environmental Economics. London: Earthscan Publications Ltd. 11p.
Baylis, S., Barker, T., Madsen, P., 1993. A UK Carbon/Energy Tax: The Macroeconomic effects, Energy Policy March 1993 pp. 296-308. (Four scenarios (which vary the assumptions about revenue recycling and international competitiveness) are developed in order to determine how a carbon/energy tax may be implemented in the UK.)
Bennet, G., & Baldock, D., 1991. AGRICULTURE: A Study of Six EC Countries. London: Institute for European Environmental Policy (IEEP). 231p.
Bernow, S.S., et al. 1993. Trash, Traffic and Taxes: Elements of Market-based Pollution Policy. Boston: Tellus Institute. 87p.
Bernstein, J.D., 1993. Alternative Approaches to Pollution Control and Waste Management: Regulatory and Economic Instruments. Washington D.C.: The World Bank. 64p.
Binswanger, H.P., 1989. Brazilian Policies that Encourage Deforestation in the Amazon. Environment Department Working Paper No. 16. Washington D.C.: World Bank. 24p.
Bishop, J., Aylward, B., & Barbier, E.B., 1991. Guidelines for Applying Environmental Economics in Developing Countries. Gatekeeper Series No. LEEC 91-02. London: International Institute for Environment and Development (IIED).
Bratton, T.J., 1994. Raising Revenue to Support Waste Services, Gersham, Brickner & Bratton Inc., Falls Church, Va June 1994 pp. 51-53.
British Columbia: Ministry of Environment, Lands and Parks, 1992. Revising British Columbia's Waste Discharge Permit Fee System: A Discussion Paper. Victoria: Evaluation, Economics and Laboratory Services Branch. 49p.
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Cairncross, F., 1993. Costing the Earth: The Challenge for Governments, the Opportunities for Business. Boston: Harvard Business School Press. 341p.
Canadian Council of Ministers for the Environment, undated. Inventory of Economic Instruments Currently in Use in Canada. Winnipeg: Canadian Council of Ministers for the Environment (CCME). 9p
Cassils, A.J.:
Cassils, A.J., 1991. Exploring Incentives: An Introduction to Incentives and Economic Instruments for Sustainable Development. Working Paper No. 13. Ottawa: National Round Table on the Environment and the Economy (NRTEE). 25p.
Cassils, A.J., 1992. Opportunities and Economic Instruments prepared for the Ontario Round Table on the Environment and the Economy. Toronto: Ontario Round Table on the Environment and the Economy. 28p. (Looks at the potential of economic instruments to increase the efficiency and effectiveness of regulation in Ontario.)
Clément, P., 1992. Environmentally Perverse Government Incentives. Working Paper No. 6. Ottawa: National Round Table on the Environment and Economy. 22p.
Conway, A.G., 1991. A role for economic instruments in reconciling agricultural and environmental policy in accordance with the Polluter Pays Principle, European Review of Agricultural Economics 18 (3-4) pp. 467-484.
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Department of the Environment, 1990. Market Mechanisms: Charging and Subsidies. London: Environmental Resources Limited. 91p.
Dower, R.C., & Zimmerman, M.B., 1992. The Right Climate for Carbon Taxes: Creating Economic Incentives to Protect the Atmosphere. Washington D.C.: World Resources Institute. 38p.
Drescher, U.M., 1993. Taxes as Instruments of Environmental Policy: With Emphasis on Air and Water Pollution. New York: Pace University School of Law, Centre for Environmental Legal Studies. 86p
DRI Canada, 1993. Canadian Competitiveness and the Control of Greenhouse Gas Emissions. Lexington: DRI/McGraw Hill division of McGraw Hill, Inc. 172p.
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Egli, N., Grut, M., & Gray, J.A., 1991. Forest Pricing and Concession Policies: Managing the High Forests of West and Central Africa. World Bank Technical Paper No. 143. Washington D.C.: World Bank. 77p.
Environment Council of Alberta, 1993. Discussion Paper: Economic Instruments for Waste Reduction. Edmonton: Environment Council of Alberta. 26p
Eskeland, G.S., & Jimenez, E., 1992. Policy Instruments for Pollution Control in Developing Countries, The World Bank Research Observer 7 (2) pp. 145-169.
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General Agreement on Tariffs and Trade, 1994. Work Starts on Environmental Charges, Taxes and Product Requirements, Trade and the Environment: News and Views from the General Agreement on Tariffs and Trade 11 October 1994. 10p.
Gofman, K.G., & Golub, A.A., 1993. Economic Mechanisms for Controlling Global Natural Processes, Matekon Fall 1993 pp. 14-26.
Golub, A.A., & Gofman, K.G., 1993. Economic Mechanisms for Controlling Global Natural Processes, Matekon Fall 1993 pp. 14-26.
Gray, J.A., Grut, M., & Egli, N., 1991. Forest Pricing and Concession Policies: Managing the High Forests of West and Central Africa. World Bank Technical Paper No. 143. Washington D.C.: World Bank. 77p.
Grubb, M., & Meyer, N.I., 1993. Wind Energy: Resources, Systems, and Regional Strategies in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H. (eds.), 1993. Renewable Energy: Sources for Fuels and Energy. Washington D.C. Island Press. 55p.
Grut, M., Gray, J.A., & Egli, N., 1991. Forest Pricing and Concession Policies: Managing the High Forests of West and Central Africa. World Bank Technical Paper No. 143. Washington D.C.: World Bank. 77p.
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Haddad, B., & Palmisano, J., 1992. The USSR's Experience with Economic Incentive Approaches to Pollution Control, Comparative Economic Studies 34 (2), pp. 50-62.
Halkos, G.E., 1993. Sulphur Abatement Policy: Implications of Cost Differentials, Energy Policy October 1993 pp. 1035-1043.
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Iten, R., & Mauch, S. 1991. Ecological Tax Reform, Case Study Switzerland (unedited draft). Zürich: Interdisciplinary Consulting Group for Natural Resources and Infrastructure Management (INFRAS). 20p.
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Jenkins, G.P., & Lamech, R., 1992. Fiscal Policies to Control Pollution: International Experience, Bulletin for International Fiscal Documentation 46 (10) pp. 483-501.
Jessinghaus, J., & Weizsäcker, E.U., von, 1992. Ecological Tax Reform: A Policy Proposal for Sustainable Development. London: Zed Books. 90p.
Jimenez, E., & Eskeland, G.S., 1992. Policy Instruments for Pollution Control in Developing Countries, The World Bank Research Observer 7 (2) pp. 145-169.
Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., 1993. Renewable Fuels and Electricity for a Growing World Economy: Defining and Achieving the Potential, in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., (eds.) Renewable Energy: Sources for Fuels and Electricity. Washington D.C.: Island Press. 71p.
Johnson, P., McKay, S., & Smith, S., 1990. The Distributional Consequences of Environmental Taxes. London: The Institute for Fiscal Studies. 55p
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Kelly, H., Johansson, T.B., Reddy, A.K.N., & Williams, R.H., 1993. Renewable Fuels and Electricity for a Growing World Economy: Defining and Achieving the Potential, in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., (eds.) Renewable Energy: Sources for Fuels and Electricity. Washington D.C.: Island Press. 71p.
Kelly, M., 1993. Market Correction: Economic Incentives for Sustainable Development. Working Paper No. 4. Ottawa: National Round Table on the Environment and the Economy (NRTEE). 44p.
Kemball-Cook, D., Baker, M., & Mattingly, C., 1991. The Green Budget. London: Green Print. 120p.
Khazzoom, J.D., 1991. The Impact of a Gasoline Tax on Auto Exhaust Emissions, Journal of Policy Analysis and Management 10 (3) pp. 434-454.
Kosmo, M., 1987. Money to Burn? The High Costs of Energy Subsidies. Washington, D.C.: World Resources Institute. 68p.
Krause, F., 1993. Cutting Carbon Emissions: Burden or Benefit? The Economics of Energy-Tax and Non-Price Policies. El Cerrito: International Project for Sustainable Energy Paths. 148p.
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Laffont, J-J., Tirole, J., 1994. Environmental Policy, Compliance and Innovation, European Economic Review 38 (3,4) pp. 555-562.
Lamech, R., & Jenkins, G.P., 1992. Fiscal Policies to Control Pollution: International Experience, Bulletin for International Fiscal Documentation 46 (10) pp. 483-501.
Lotker, M., 1991. Barriers to Commercialization of Large-scale Solar Electricity: Lessons Learned from the Luz Experience. Albuquerque: Sandia National Laboratories.
Lutz, E., & Young, M., 1990. Agricultural Policies in Industrial Countries and Their Environmental Impacts: Applicability to and Comparisons with Developing Nations. Environment Working Paper No. 25. Washington D.C.: World Bank. 21p.
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Madsen, P., Barker, T., & Baylis, S., 1993. A UK Carbon/Energy Tax: The Macroeconomic effects, Energy Policy March 1993 pp. 296-308. (Four scenarios (which vary the assumptions about revenue recycling and international competitiveness) are developed in order to determine how a carbon/energy tax may be implemented in the UK.)
Manne, A.S., & Richels, R.G., 1993. The EC Proposal for Combining Carbon and Energy Taxes: The implications for the future CO2 emissions, Energy Policy January 1993, pp. 5-12. (The Global 2100 Model is applied to evaluate the EC proposal of combining carbon and energy taxes, and its effects on the USA and Western European countries as a whole.)
Marceau, R., & Migué, J-L., 1993. Pollution Taxes, Subsidies, and Rent Seeking, Canadian Journal of Economics 26 (2) pp. 355-365.
Markandya, A.:
Markandya, A., Barbier, E.B., & Pearce, D., 1989. Blueprint for a Green Economy. London: Earthscan Publications Ltd. 192p.
Markandya, A., Barbier, E.B., Pearce, D., Barret, S., Turner, K., & Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Mauch, S. & Iten, R., 1991. Ecological Tax Reform, Case Study Switzerland (unedited draft). Zürich: Interdisciplinary Consulting Group for Natural Resources and Infrastructure Management (INFRAS). 20p.
Mattingly, C., & Kemball-Cook, D., Baker, M., 1991. The Green Budget. London: Green Print. 120p.
McKay, S., Johnson, P., & Smith, S., 1990. The Distributional Consequences of Environmental Taxes. London: The Institute for Fiscal Studies. 55p
Meyer, N.I., & Grubb, M., 1993. Wind Energy: Resources, Systems, and Regional Strategies in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H. (eds.), 1993. Renewable Energy: Sources for Fuels and Energy. Washington D.C. Island Press. 55p.
Migué, J-L., & Marceau, R., 1993. Pollution Taxes, Subsidies, and Rent Seeking, Canadian Journal of Economics 26 (2) pp. 355-365.
Ministry of Agriculture and Fisheries (New Zealand), 1993. Impacts on the Environment of Reduced Agricultural Subsidies: A Case Study of New Zealand. MAF Policy Technical Paper 93/12. Wellington: Ministry of Agriculture and Fisheries. 26p.
Moran, D., 1992. Fiscal Options and Environmental Conservation in UK Agriculture and Forestry. Discussion Paper GEC 92-14. London: Centre for Social and Economic Research on the Global Environment (CSERGE). 33p.
Muller, F.:
Muller, F., & Sachs, H.M., 1993. Renewable Energy and Pollution Prevention in Southern California. Maryland: Centre for Global Change. 14p.
Muller, F., 1992. Air Pollution Tax for Maryland: Questions and Answers. Maryland: Centre for Global Change. 7p.
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Nicoletti, G., & Oliviera-Martins, J., 1992. Global Effects of the European Carbon Tax. Economics Department Working Papers No. 125 Paris: Organisation for Economic Co-operation and Development. 35p. (GREEN; the global, dynamic, applied general equilibrium model developed by the OECD secretariat, is used to determine the effectiveness of the proposed tax measures and their implications for other countries/regions of the world.)
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Oates, W.E., & Baumol, W.J., 1992. The use of Standards and Prices for Protection of the Environment, in Markandya, A., & Richardson, J., (eds.) 1992. The Earthscan Reader in Environmental Economics. London: Earthscan Publications Ltd. 11p.
Oliviera-Martins, J., & Nicoletti, G., 1992. Global Effects of the European Carbon Tax. Economics Department Working Papers No. 125 Paris: Organisation for Economic Co-operation and Development. 35p. (GREEN; the global, dynamic, applied general equilibrium model developed by the OECD secretariat, is used to determine the effectiveness of the proposed tax measures and their implications for other countries/regions of the world.)
Ontario Government: The Environment and Taxation Working Group of the Ontario Fair Tax Commission, 1992. Final Report -- Environment and Taxation. Toronto: Fair Tax Commission. 56p.
Ontario Ministry of the Environment, 1991. Options for Environmental Protection and Management in Ontario. Toronto: Ernst & Young. 214p.
Opschoor, J.B., 1990. Economic Instruments for Sustainable Developmentin The Norwegian Research Council for Science and the Humanities (ed.), Sustainable Development, Science and Policy. Oslo: The Norwegian Research Council for Science and the Humanities (NAVF). 17p.
Organisation for Economic Co-operation and Development:
Organisation for Economic Co-operation and Development, 1994. Managing the Environment: The Role of Economic Instruments. Paris: Organisation for Economic Co-operation and Development. 191p.
Organisation for Economic Co-operation and Development, 1989. Agricultural and Environmental Policies: Opportunities for Integration. Paris: Organisation for Economic Co-operation and Development. 199p.
Organisation for Economic Co-operation and Development, 1992. Climate Change: Designing a Practical Tax System. Paris: Organisation for Economic Co-operation and Development. 271p.
Organisation for Economic Co-operation and Development, 1992. Market and Government Failures In Environmental Management: The Case of Transport. Paris Organisation for Economic Co-operation and Development (OECD). 90p.
Owens, J., 1993. Environment and Taxation: Mutually Reinforcing Policies, Bulletin for International Fiscal Documentation 47 (12) pp. 708-710.
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Palmisano, J., & Haddad, B., 1992. The USSR's Experience with Economic Incentive Approaches to Pollution Control, Comparative Economic Studies 34 (2), pp. 50-62.
Pearce, D.:
Pearce, D., Barbier, E.B., & Markandya, A., 1989. Blueprint for a Green Economy. London: Earthscan Publications Ltd. 192p.
Pearce, D., & Turner, K., 1992. Packaging Waste and the Polluter Pays Principle - A Taxation Solution. Discussion Paper WM 92-01, London: Centre for Social and Economic Research on the Global Environment (CSERGE). 20p.
Pearce, D., Barbier, E.B., Markandya, A., Barret, S., Turner, K., & Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Pearce, D., & Turner, K., 1993. Market-based Approaches to Solid Waste Management, Resources, Conservation and Recycling 8 pp. 63-90.
Pearce, D., & Warford, J.J., 1993. World Without End. New York: Oxford University Press. 440p. (Covers issues of sustainable development, environmental degradation and the economy.)
Pearson, M., & Smith, S., 1991. The European carbon Tax: An Assessment of the European Commission's Proposals. London: The Institute for Fiscal Studies. 57p.
Peck, S.C., & Teisberg, T.J., 1993. CO2 Emissions Control: Comparing policy instruments, Energy Policy March 1993, pp. 222-230.
Plackett, A.C., 1994. Invisible Persuaders, CA Magazine 127 (9) pp. 42-45.
Proost, S., & Van Regemorter, D., 1992. Economic Effects of a Carbon Tax, with general equilibrium illustration for Belgium, Energy Economics 14 (2) pp. 136-149.
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Reddy, A.K.N., Johansson, T.B., Kelly, H., & Williams, R.H., 1993. Renewable Fuels and Electricity for a Growing World Economy: Defining and Achieving the Potential, in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., (eds.) Renewable Energy: Sources for Fuels and Electricity. Washington D.C.: Island Press. 71p.
Repetto, R.:
Repetto, R., 1990. Promoting Environmentally Sound Economic Progress: What the North Can Do. Washington D.C.: World Resources Institute. 21p.
Repetto, R., 1988. Economic Policy Reform for Natural Resource Conservation. Environment Department Working Paper No. 4. Washington D.C.: World Bank. 44p.
Repetto, R., 1988. The Forest for the Trees? Government Policies and the Misuse of Forest Resources. Washington D.C.: World Resources Institute. 105p.
Repetto, R., 1992. Green Fees: How a Tax Shift can Work for the Environment and the Economy. Washington D.C.: World Resources Institute. 96p.
Richels, R.G.:
Richels, R.G., & Manne, A.S., 1993. The EC Proposal for Combining Carbon and Energy Taxes: The implications for the future CO2 emissions, Energy Policy January 1993, pp. 5-12. (The Global 2100 Model is applied to evaluate the EC proposal of combining carbon and energy taxes, and its effects on the USA and Western European countries as a whole.)
Rocky Mountain Institute Agricultural Program, 1992. Farm Subsidies: Consequences and Alternatives. Colorado: Rocky Mountain Institute. 59p.
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Sachs, H.M., & Muller, F., 1993. Renewable Energy and Pollution Prevention in Southern California. Maryland: Centre for Global Change. 14p.
Shane, D.M., & Von Witzke, H., 1993. The Environment, Government Policies, and International Trade: A Proceedings. Washington D.C.: United States Department of Agriculture: Agriculture and Trade Analysis Division. 272p.
Smith, S:
Smith, S., Johnson, P., & McKay, S., 1990. The Distributional Consequences of Environmental Taxes. London: The Institute for Fiscal Studies. 55p
Smith, S., Pearson, M., 1991. The European carbon Tax: An Assessment of the European Commission's Proposals. London: The Institute for Fiscal Studies. 57p.
Stavins, R.N., 1990. Innovative Policies for Sustainable Development in the 1990s: Economic Incentives for Environmental Protection. Discussion Paper No. QE90-11. Washington D.C.: Resources for the Future. 28p.
Swanson, T., Markandya, A., Barbier, E.B., Pearce, D., Barret, S., & Turner, K., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
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Teisberg, T.J., & Peck, S.C., &1993. CO2 Emissions Control: Comparing policy instruments, Energy Policy March 1993, pp. 222-230.
Tietenberg, T.H., 1992. Economic Instruments for Environmental Regulation in Markandya, A., & Richardson, J., (eds.) The Earthscan Reader in Environmental Economics. London: Earthscan Publications Ltd. 21p.
Tirole, J., Laffont, J-J., 1994. Environmental Policy, Compliance and Innovation, European Economic Review 38 (3,4) pp. 555-562.
Turner, K.:
Turner, K., Markandya, A., Barbier, E.B., Pearce, D., Barret, S.,& Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Turner, K., & Pearce, D., 1992. Packaging Waste and the Polluter Pays Principle - A Taxation Solution. Discussion Paper WM 92-01, London: Centre for Social and Economic Research on the Global Environment (CSERGE). 20p.
Turner, K., & Pearce, D., 1993. Market-based Approaches to Solid Waste Management, Resources, Conservation and Recycling 8 pp. 63-90.
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Van Regemorter, D., & Proost, S., 1992. Economic Effects of a Carbon Tax, with general equilibrium illustration for Belgium, Energy Economics 14 (2) pp. 136-149.
Von Witzke, H., & Shane, D.M., 1993. The Environment, Government Policies, and International Trade: A Proceedings. Washington D.C.: United States Department of Agriculture: Agriculture and Trade Analysis Division. 272p.
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Warford, J.J., & Pearce, D., 1993. World Without End. New York: Oxford University Press. 440p. (Covers issues of sustainable development, environmental degradation and the economy.)
Weizsäcker, E.U., von, & Jessinghaus, J., 1992. Ecological Tax Reform: A Policy Proposal for Sustainable Development. London: Zed Books. 90p.
Williams, J.R., 1990. Social Traps and Incentives: Implications for low-input, sustainable agriculture, Journal of Soil and Water Conservation 45 (1) pp. 28-30.
Williams, R.H., Johansson, T.B., Kelly, H., & Reddy, A.K.N., 1993. Renewable Fuels and Electricity for a Growing World Economy: Defining and Achieving the Potential, in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., (eds.) Renewable Energy: Sources for Fuels and Electricity. Washington D.C.: Island Press. 71p.
World Bank, 1993. Jamaica: Economic Issues for Environmental Management. Washington D.C.: World Bank. 27p.
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Young, M., & Lutz, E., 1990. Agricultural Policies in Industrial Countries and Their Environmental Impacts: Applicability to and Comparisons with Developing Nations. Environment Working Paper No. 25. Washington D.C.: World Bank. 21p.
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Zimmerman, M.B., & Dower, R.C., 1992. The Right Climate for Carbon Taxes: Creating Economic Incentives to Protect the Atmosphere. Washington D.C.: World Resources Institute. 38p.
Barbier, E.B.., 1992. The Nature of Economic Instruments: A Brief Overview. Gatekeeper Series No. GK 29-02. London: International Institute for Environment and Development (IIED). 9p
Economic instruments do not directly control or restrict activities that degrade the environment. Rather, they create the economic incentives for individuals to choose freely to modify their activities, thus indirectly producing an environmental improvement. In this paper, use of the term economic instruments has been restricted to the following categories: charges (taxes), subsidies, deposits and/or refunds, tradable or marketable permits, and compensatory incentives. An important criterion for the selection of an environmental policy instrument is deemed to be its cost-effectiveness or economic efficiency in achieving the desired improvement in environmental quality. The author discusses this criterion vis-à-vis instruments and regulations; as well as policy-makers', firms' and individuals' preference for regulations. Hence, he concludes that instruments and regulations will be used in conjunction in the future.
Keywords: charges, subsidies, tax allowances, deposit-refund system, feebate system, tradable or marketable permits, compensatory incentives, regulations, preferences, criteria.
Related sources by the same author:
Barbier, E.B.., 1989. The Contribution of Environmental and Resource Economics to an Economics of Sustainable Development, Development and Change 20 (3) pp. 429-459.
Bishop, J., Aylward, B., & Barbier, E.B., 1991. Guidelines for Applying Environmental Economics in Developing Countries. Gatekeeper Series No. LEEC 91-02. London: International Institute for Environment and Development (IIED).
Baumol, W.J., & Oates, W.E., 1992. The use of Standards and Prices for Protection of the Environment, in Markandya, A., & Richardson, J., (eds.) 1992. The Earthscan Reader in Environmental Economics. London: Earthscan Publications Ltd. 11p.
Differences between the pricing and standards approach and the Pigouvian-prescription for the control of externalities are examined. The main motivation for adopting the pricing and standards approach is that no exact method exists for determining the optimal Pigouvian tax (equal to the marginal net damage) which leads to Pareto-efficient levels of activities. This is because sufficient information to determine optimal Pigouvian taxes or subsidies is lacking. In contrast, the pricing and standards approach sets predetermined standards for environmental quality and then imposes taxes which are sufficient to achieve these standards. While this method does not purport to achieve the optimal allocation of resources, it does at least offer some workable way of reducing the level of environmental damage.
Keywords: Pigouvian taxes, pricing and standards approach, public policy.
Related Sources by the same author:
The above citation was first published in the Swedish Journal of Economics 73 March 1971 pp. 42-54. This same article has also been included in: Oates, W.E., (ed.) 1992. The Economics of the Environment. Aldershot: Edward Elgar Publishing Limited.
A general overview is given of the variety of economic instruments available to implement sustainable development in Canada. It is also intended to inspire further discussion of the merits and application of many types of economic instruments. Regulatory structures, economic instruments, information-based incentives, public awards, institutional change, and other incentives are presented to illustrate options available to integrate the three components of sustainable development.
As concluded while considering the various incentives and economic instruments, each situation will demand a different response. In most cases, a mix of incentives and economic instruments may be needed. There has been extensive discussion about economic instruments for sustainable development, but there is little hands-on experience.
Keywords: economic instruments, Canada, regulation, sustainable development
Related Sources by the Same Author:
Cassils, A.J., 1992. Opportunities and Economic Instruments prepared for the Ontario Round Table on the Environment and the Economy. Toronto: Ontario Round Table on the Environment and the Economy. 28p. (Looks at the potential of economic instruments to increase the efficiency and effectiveness of regulation in Ontario.)
Commission of the European Communities, 1990. Report of the Working Group of Experts from the Member States on the Use of Economic Instruments in EC Environmental Policy. Belgium: Directorate-General Environment, Nuclear Safety and Civil Protection. 19p.
This document examines the extent and use of economic and fiscal instruments in environmental policy in the European Community. A plea is made for collective action, a common approach in the use of economic instruments and fiscal policy for EC member countries, and the scope of community action in accordance with the subsidiarity approach. Basic elements of economic instruments, and environmental problems in which economic instruments can be applied are discussed. Two annexes are included at the end of the document; one comparing various types of economic instruments and another describing some successful examples of economic instruments currently applied in Europe.
Keywords: European Community, collective action, subsidiarity, economic instruments, energy, pollution, traffic, waste management, case studies.
Conway, A.G., 1991. A role for economic instruments in reconciling agricultural and environmental policy in accordance with the Polluter Pays Principle, European Review of Agricultural Economics 18 (3-4) pp. 467-484.
An argument is made for treating food production (the result of agriculture) as an ecological process. In so doing, the efficiency of the process is to be judged not only in terms of minimising waste products and pollution, but also improving the energy gains and nutritional quality of food production and sustaining or enhancing the productive capacity of basic resources. A multiple-goal-programming (MPG) framework is proposed for solving the problem. By so doing it becomes possible to integrate various policy areas into the policy formulation process. So, in this case, environmental considerations can be incorporated in agricultural policy measures so as to guide the form of agricultural development along environmentally friendly lines. Within this context, then, economic instruments are discussed as a means to achieve environmental goals
Keywords: agriculture, Polluter Pays Principle, economic instruments, property rights, ecosystems approach.
Eskeland, G.S., & Jimenez, E., 1992. Policy Instruments for Pollution Control in Developing Countries, The World Bank Research Observer 7 (2) pp. 145-169.
Currently only casual evidence exists to show that regulations to protect the environment in developing countries is ineffective or unnecessarily costly. Evidence which points to the destructiveness of pollution in these countries is mounting, however. This article reviews the design of cost-effective measures to protect the environment from excessive pollution in developing countries, and is restricted to the case of domestic pollution. In tackling the issue, common practices (and underlying assumptions) in the industrialised countries are examined. The assumptions of competitive markets, costless transfers, certainty and full information are abolished and replaced with the following assumption for developing countries: a public revenue constraint, inability to monitor emissions and damages, uncertainty, and a market structure that is not competitive. Within this context it is concluded that indirect economic instruments are more workable and cost-effective than directly targeting externalities ( like taxing a polluter). Once such a structure is in place, it becomes possible to cultivate capacity for monitoring and enforcement, and setting priorities for the future. Schemes which encourage self-compliance should also be considered.
Keywords: developing countries, domestic pollution, market-based instruments, command and control instruments.
Jenkins, G.P., & Lamech, R., 1992. Fiscal Policies to Control Pollution: International Experience, Bulletin for International Fiscal Documentation 46 (10) pp. 483-501.
Pollution abatement is best influenced by using market forces that integrate economic and environmental decision-making. This article analyses investment tax incentives in pollution control equipment and technology, taxes on goods and inputs based on environmental externalities, and user charges. It is a comparative analysis of the fiscal instruments applied in countries in Asia, Europe and North America. The authors conclude that tax incentives for investment in pollution-control equipment are dominant world-wide. Several countries in North America, Europe and Asia are considering other forms of market-based incentives.
Keywords: market based instruments, taxes, charges, deposit-refund system, charges.
Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., 1993. Renewable Fuels and Electricity for a Growing World Economy: Defining and Achieving the Potential, in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H., (eds.) Renewable Energy: Sources for Fuels and Electricity. Washington D.C.: Island Press. 71p.
Since the United Nations Conference on the Environment and Development, a strong focus on the use of energy has developed. Research and development of renewable energy sources has increased. This has been in response to the demand to drastically reduce the externalities related to the use of fossil fuels. The field of renewable resources is a relatively new one and taxation policy is still in its infancy. This paper provides an introduction to the area of renewable resources, the issues and policy possibilities. In particular, policy is aimed at encouraging the development of alternative energy sources. Market incentives play an important role. These incentives are discussed with reference to biomass, geothermal, ocean, wind, solar, nuclear and hydro-energy.
Keywords: renewable energy, taxes, subsidies, distributive credits, tax allowances, interest rates.
Kelly defines economic instruments as "those policies that allow regulated parties to consider costs and benefits in their responses to regulations." Because there is a choice of responses, they are often referred to as market-based. The rationale for utilising such instruments, as opposed to regulations, is that they stimulate research into, and development of, leading-edge technology and alternative production techniques, products and services. Thus a market for results is created while simultaneously ensuring that costs are minimised. But if they are such a good idea, why are they not utilised as much as they could be? The reason given is that people resist change and an analysis of stakeholders' resistance is put forward. New forms of decision-making are needed to overcome this problem. One solution offered is "consensus decision-making" and is illustrated with an example of the Economic Instruments Collaborative in Canada. (The bibliography includes references to case studies on the implementation of economic instruments in other countries.)
Keywords: economic instruments, environmental research and development, stakeholders, consensus decision-making.
Kemball-Cook, D., Baker, M., & Mattingly, C., 1991. The Green Budget. London: Green Print. 120p.
The Green Budget is a self-financing package of measures that can be taken by a British Government. It proposes that the goals of economic policy should be replaced with the following three objectives: ecological sustainability; equity across nations and generations; and the decentralisation of economic power. This is achieved via environmental taxation and the recycling of half the revenues into the supply-side. As outlined, the budget attacks the poverty trap with large increases in child benefits and the basic tax allowance. The medium-term objective is an unconditional basic income paid weekly to all adults. Decentralisation of the economy is achieved through replacing the poll tax and the Uniform Business rate with locally determined and established taxation. Finally, it is observed that these economic policies form only part of the packages of changes necessary to achieve a green society.
Keywords: budgets, economic instruments, sector analysis.
Oates, W.E., 1992. The Economics of the Environment. Aldershot: Edward Elgar Publishing Limited. 608p.
"The Economics of the Environment" is a collection of essays on economic and environmental issues. This compilation comprises the definitive, and not so definitive, pieces on economic instruments for the protection of the environment. Many of the articles included in the collection represent ground-breaking work in the field and go as far back as 1960 to include Coase's work on "The Problem of Social Cost". In this sense, the book offers a comprehensive look at trends in the evolution of economic instruments and their application over the last 25 years. Topics cover theory, design and implementation of environmental policy, measuring benefits and costs, and enforcement of such policies.
Keywords: environmental economics, externalities, economic instruments, measurement, policy.
Opschoor, J.B., 1990. Economic Instruments for Sustainable Developmentin The Norwegian Research Council for Science and the Humanities (ed.), Sustainable Development, Science and Policy. Oslo: The Norwegian Research Council for Science and the Humanities (NAVF). 17p.
The use of economic instruments is contextualised within a sustainable development framework. The premise is that economic growth is unsustainable because economic agents shift adverse costs onto others. Policy makers can counteract such behaviour in one of three ways. They can alter the set of options open to decision makers (i.e. regulate); alter relevant price signals (i.e. utilise economic instruments); or alter the value structure of decision makers (i.e. attempt moral suasion). Opschoor limits the discussion to economic instruments with cursory reference to regulation. The prospect for their usage and the hindrances are also looked at.
Keywords: market failures, economic instruments, policy.
Organisation for Economic Co-operation and Development, 1994. Managing the Environment: The Role of Economic Instruments. Paris: Organisation for Economic Co-operation and Development. 191p.
"Managing the Environment...." is the OECD's most recent survey of the use of economic instruments in its member countries. Since the first survey, conducted in 1989, the variety and scope of instruments has increased considerably. The policy framework and rationale behind economic instruments is discussed after which the survey reviews the use of charges on emissions, charges on products, deposit refund systems, emission trading and taxation. Country case studies are used to illustrate the practical application of these instruments. Implications for international trade are examined as well as the possibility of applying economic instruments across national boundaries.
Keywords: environmental management, economic instruments, policy, OECD-countries, global environmental problems, sustainable development, criteria.
Owens, J., 1993. Environment and Taxation: Mutually Reinforcing Policies, Bulletin for International Fiscal Documentation 47 (12) pp. 708-710.
How tax measures affect the environment and what tax regime can best produce environmental protection without damaging production are the questions raised in this article. Government failures in the tax system are identified as an important contributor to the problem. As such, four underlying principles for modern tax systems are examined. Earmarking, fiscal neutrality, revenue neutrality and fairness are fundamentals which need to be taken into account when designing a new "environmentally friendly" tax regime. Options available to governments for achieving such a goal are also covered.
Keywords: government failures, earmarking, fiscal neutrality, revenue neutrality, fairness, taxes and charges.
Pearce, D., Markandya, A., & Barbier, E.B., 1989. Blueprint for a Green Economy. London: Earthscan Publications Ltd. 192p.
Environmental degradation is largely the result of incorrect pricing mechanisms for environmental resources. What Blueprint for a Green Economy seeks to do is demonstrate the rationale behind current economic decision making and to show that the economy and the environment are inextricably linked. This concept is weaved into the concept of sustainable development in such a manner as to ensure that not only environment and economic issues are taken into account in decision making, but also socio-economic issues. Pearce et al. go through the various ways in which the environment can be more accurately valued and use this as a foundation for the formulation of economic instruments which promote environmental protection. Pricing mechanisms, the polluter pays principle, charges and taxes are put forward as possible alternatives.
Keywords: sustainable development, environmental valuationeconomic incentives.
Related Sources by the Same Author:
Pearce, D., Barbier, E.B., Markandya, A., Barret, S., Turner, K., & Swanson, T., 1991. Blueprint 2: Greening the World Economy. London: Earthscan Publications Ltd. 232p.
Pearce, D., 1993. Blueprint 3: Measuring Sustainable Development. Toronto: Earthscan Canada. 224p.
Pearce, D., 1995. Blueprint 4: Sustaining the Earth - Capturing Global Value. London: Earthscan Publications Ltd. 192p. (still in press).
Plackett, A.C., 1994. Invisible Persuaders, CA Magazine 127 (9) pp. 42-45.
A short, concise article, written from the businessman's perspective, on the role of market incentives in promoting environmental integrity. Plackett summarises all the most important points in the sustainable development debate and incorporates these into a discussion on the use of economic instruments. It includes a list of eco-charges with definitions.
Keywords: sustainable development, market incentives, eco-charges.
Pearce, D., 1989. The Polluter Pays Principle. Gatekeeper Series No. LEEC 89-03. London: International Institute for Environment and Development. 5p.
The Polluter Pays Principle (PPP) is defined along with its underlying economic principles. It describes the misunderstanding of the concept of PPP and the methods of internalising cost. A comparison of how the principle works in developed and developing countries is made.
Keywords:
Polluter Pays Principle, cost internalisation.
Related Sources by the same Author:
Pearce, D., & Warford, J.J., 1993. World Without End. New York: Oxford University Press. 440p. (Covers issues of sustainable development, environmental degradation and the economy.)
Repetto, R., 1990. Promoting Environmentally Sound Economic Progress: What the North Can Do. Washington D.C.: World Resources Institute. 21p.
The industrial North can be held largely responsible for solving the problem of natural resource depletion, partly because it is to blame and partly because it has the financial and technical resources to do so. The author advances the idea that the more industrialised countries can promote sustainable economic progress without sacrificing living standards, possibly even raising productivity and strengthening the global economy. He says that these countries must undertake development of the world economy without environmental degradation. Repetto's proposal to initiate changes includes the reconfiguration of national-income accounting to reflect natural resources losses; the dismantling of farm policies that disrupt trade and penalise developing countries' farmers; the revamping of economic policies to discourage pollution waste; the imposition of fossil fuel taxes to encourage energy efficiency and technology development; and the provision of debt relief to developing countries within a more supportive policy framework for international trade, investment, technology transfer, and finance. As Repetto concludes, "The challenge is not so much to discover what must be done to ensure sustainability. The challenge is to discover how to do it."
Keywords: environmental management, pollution, economic instruments.
Related Sources by the Same Author:
Repetto, R., 1988. Economic Policy Reform for Natural Resource Conservation. Environment Department Working Paper No. 4. Washington D.C.: World Bank. 44p.
Repetto, R., 1988. The Forest for the Trees? Government Policies and the Misuse of Forest Resources. Washington D.C.: World Resources Institute. 105p.
Repetto, R.,, 1992. Green Fees: How a Tax Shift can Work for the Environment and the Economy. Washington D.C.: World Resources Institute. 96p.
Weizsäcker, E.U., von, & Jessinghaus, J., 1992. Ecological Tax Reform: A Policy Proposal for Sustainable Development. London: Zed Books. 90p.
Nothing short of an efficiency revolution in our use of natural resources is necessary to convert the technologically possible into the economically feasible, according to the authors. In the context of this premise, the they survey the following economic instruments: tradable permits, pollution charges, refund systems and "green taxes". The impact of the price elasticity of fuel on the transport sector is reviewed as one example of the practical viability of these proposals. Objections to the proposal of ecological tax reform are also looked at. What is ultimately proposed is ecological tax reform which moves the tax base away from corporation and income taxes towards ecological taxes in a revenue neutral manner. These taxes should be easy to administer, internationally harmonised, and combined with measures to compensate for any negative distribution effects.
Keywords: energy, efficiency, ecological tax reform, emission trading, charges, subsidies, refunds, polluter pays principle, transportation, criteria.
PUBLIC EXPENDITURE INSTRUMENTS
DRI Canada, 1993. Canadian Competitiveness and the Control of Greenhouse Gas Emissions. Lexington: DRI/McGraw Hill division of McGraw Hill, Inc. 172p.
Taxes and economic instruments are reviewed in order to determine what would be the most effective means of achieving greenhouse gas emission stability in Canada. A regression is run to assess the economic impact of both policy options on the economy as a whole and on individual regions and industries. In order to do this, a base case and an instruments case was set up. The results indicate that an instruments package has a more extensive effect than the carbon tax, particularly in the period between the years 2000 and 2010. Though real economic activity declined modestly, the efficiency with which the economy's factors are used improved.
Keywords: greenhouse gas emissions, taxes, policy options, competitiveness.
Grubb, M., & Meyer, N.I., 1993. Wind Energy: Resources, Systems, and Regional Strategies in Johansson, T.B., Kelly, H., Reddy, A.K.N., & Williams, R.H. (eds.), 1993. Renewable Energy: Sources for Fuels and Energy. Washington D.C. Island Press. 55p.
Emerging technologies like wind power must compete with well established sources of electricity such as fossil fuels, hydropower and nuclear power. Many of these industries are favoured above wind power within the tax regime. Thus, tax reform within existing industries needs to take place as well as the incorporation of wind energy into the taxation system. This paper looks at various economic incentives which have been used by Denmark and California to promote the development of wind technologies. Lessons learnt from the experiences of the two countries are included in the recommendations.
Keywords: wind power, tax credits, subsidies, rebates, grants, Denmark, California.
Comments:
While this paper is not 100 percent on the topic of economic instruments, the author felt it valuable to include the paper as it gives some insight into the policy issues of dealing with wind power. This paper also discusses wind resources, the potential and constraints of the energy resource, and possibilities for integrating wind generated electricity with conventional electricity.
Related Sources:
Gipe, P, 1995. Wind Energy Comes of Age. New York: John Wiley & Sons. 560p.
Kosmo, M., 1987. Money to Burn? The High Costs of Energy Subsidies. Washington, D.C.: World Resources Institute. 68p.
Money to Burn? demonstrates how public subsidies of energy production and consumption affect government budgets, encourage resource depletion, and limit the prospects for economic growth. It points the way to politically and economically acceptable policies for more effective energy use based on sharp increases in efficiency in both rich and poor countries alike. Kosmo explains the effects of these policies on environmental protection, balance of trade, government revenues, inflation, industrial development, income redistribution, supply, and energy price stability.
Keywords: subsidies, energy subsidies, macroeconomic effects, microeconomics effects.
Lotker, M., 1991. Barriers to Commercialization of Large-scale Solar Electricity: Lessons Learned from the Luz Experience. Albuquerque: Sandia National Laboratories.
This report discusses the economic and policy factors leading to the initial successful introduction of Luz International Limited's Solar Electric Generating Systems (SEGS). It then addresses the wide range of barriers to continued SEGS commercialisation, including state and federal tax policy, avoided cost energy pricing, artificial size limitations under the Public Utility Regulatory Policies Act (PURPA), the loss of effectiveness of PURPA itself, the lack of incentives available to utilities as owners of solar electric plants, and the limited way in which the environmental benefits of this technology have been recognised. The way in which each of these barriers contributed to the suspension of Luz projects is highlighted. In addition, mitigation approaches to each of these barriers are suggested.
Keywords: renewable energy, solar energy, tax allowances, grants.
Lutz, E., & Young, M., 1990. Agricultural Policies in Industrial Countries and Their Environmental Impacts: Applicability to and Comparisons with Developing Nations. Environment Working Paper No. 25. Washington D.C.: World Bank. 21p.
Growth of agricultural output in both developing and industrialised countries alike has resulted in long-term resource depletion. What this paper sets out to do is to present the types of environmental and resource-related agricultural policy adjustments that could properly address the costs of resource degradation and increase long-term prospects for sustainable development. The paper discusses the "Polluter Pays Principle", taxes, inputs, other subsidies, regulations and enforcement issues in developed and developing countries. The role of other measures relevant to environmentally sound agricultural development are also discussed, including income-tax concessions, information and research priorities, land-tenure and credit policies, security and its possible effects on long-term investment. The authors conclude that progress is possible especially through developing policies that internalise external costs and in the preparation of natural resource accounts and other information which enable decision makers to appreciate the environmental costs of the policy options under consideration.
Keywords: agriculture, subsidies, tax allowances, taxes, polluter-pays principle.
Ministry of Agriculture and Fisheries (New Zealand), 1993. Impacts on the Environment of Reduced Agricultural Subsidies: A Case Study of New Zealand. MAF Policy Technical Paper 93/12. Wellington: Ministry of Agriculture and Fisheries. 26p.
Since 1984 New Zealand has embarked upon the liberalisation of its agricultural policy. Agricultural assistance was viewed as the main source of environmental degradation due to the fact that subsidies to agricultural inputs and outputs can distort both input and output mix, the intensiveness of the production systems, and the locality and distribution of the systems and their effects. Over the period under consideration most reform has consisted of the reduction in price support. Any agricultural assistance which New Zealand now grants comprises "value added" measures (research, interest rate concessions, transport subsidies etc.). While this policy has gone a long way toward ensuring a sustainable future, policy does not operate in a closed environment. Thus, long-term sustainability can be achieved by integrating agricultural policies with those effecting macroeconomic conditions, environment management and adverse climatic relief policies. The report concludes with the observation that measures decoupled from the production process and which are not trade distorting are likely to be less environmentally damaging.
Keywords: New Zealand, agriculture, subsidies, input usage, international application, Uruguay Round.
Muller, F., & Sachs, H.M., 1993. Renewable Energy and Pollution Prevention in Southern California. Maryland: Centre for Global Change. 14p.
This report, written for the South Coast Air Quality Management District, covers the potential of renewable energy to prevent air pollution in southern California. Three types of renewable energy are looked at: solar, wind and geothermal. These technologies are in various stages of development and market penetration. They are, however, becoming more competitive in the electricity generation sector of southern California. The reason cited for this is the forward thinking of the government who provided tax allowances as an incentive for innovation and the adoption of such technologies. One of the greatest stumbling blocks to widespread adoption of renewable energy has been regulation which has allowed traditional utilities to continue producing electricity with fossil fuels. The report recommends that the eradication of this regulation should be accompanied by further tax allowances which encourage existing utilities to start replacing their production with the new technology.
Keywords: renewable energy, pollution prevention, tax allowances.
Organisation for Economic Co-operation and Development, 1989. Agricultural and Environmental Policies: Opportunities for Integration. Paris: Organisation for Economic Co-operation and Development. 199p.
A conflict of interests has arisen between agriculture and the environment as a result of increased support for agriculture and improved technology. There are, however, many ways in which environmental and agricultural policy can be integrated to ensure environmental protection and sustainable agriculture. This publication looks at the areas of conflict; intensive crop production, the use of chemicals, intensive animal production and the management of animal manure, dryland agriculture, soil conservation and the management of soil erosion; and examines new alternatives for integrating policy. Practical examples of policies already adopted in OECD countries are used as a backdrop for this discussion.
Keywords: agriculture, conservation, land set aside programmes, integration, grants, tax allowances, pricing policies, input taxes.
Rocky Mountain Institute Agricultural Program, 1992. Farm Subsidies: Consequences and Alternatives. Colorado: Rocky Mountain Institute. 59p.
American farmers have enjoyed a privileged position within the US economy. Consequently, they have not had to respond to the messages of the free market. This has resulted in overproduction, environmental degradation and rural community collapse which is clearly unsustainable. The cost of agricultural protection is high. Hence, this document explores the effect of U. S. federal subsidies on farm structure and the environment and proposes improvements to these programs.
Keywords: subsidies, sustainable agriculture, policy.
Shane, D.M., & Von Witzke, H., 1993. The Environment, Government Policies, and International Trade: A Proceedings. Washington D.C.: United States Department of Agriculture: Agriculture and Trade Analysis Division. 272p.
This report contains papers presented at the December annual meeting of the International Agricultural Trade Research Consortium in San Diego, California. The theme of the meeting was the relationship between the environment, public goods, government policies, and international trade. The interpretation of this theme by the various authors led to analyses of issues related to both the physical and institutional environment. The growing pressures on the physical environment from continuing growth and development as well as the pressures on the institutional environment from changing technology of production, communications, and trade necessitate a fundamental rethinking and restructuring of the rules under which we have done business in the past.
Keywords: environment, public goods, government policies, agricultural trade, constitutional economics, GATT, Uruguay Round.
Williams, J.R., 1990. Social Traps and Incentives: Implications for low-input, sustainable agriculture, Journal of Soil and Water Conservation 45 (1) pp. 28-30.
Social traps occur when individuals act out of self-interest because of short term gains resulting in a detrimental effect on the society in the long-run. According to Williams, agricultural producers get caught in a social trap because of the incentives they receive for current production practices. In order to avoid these social traps current incentive programs need to be replaced with an alternative incentive program which has sustainable agriculture as its goal. Such an incentive program would consist of tax credits, taxes, charges, user fees and feebates (although they are not referred to as such in the text).
Keywords: sustainable agriculture, social traps, tax credits, user fees, charges, taxes, feebates.
World Bank, 1993. Jamaica: Economic Issues for Environmental Management. Washington D.C.: World Bank. 27p.
Jamaica has embarked upon the task of improving its environmental quality in response to the United Nations Conference on Environment and Development (UNCED). What has been noteworthy about Jamaican experience with environmental improvement is that the private sector has led the way with government playing an auxiliary role. This report examines what policy action the government can employ on an issues basis. The use of both economic incentives and regulations is recommended and summed up in a matrix.
Keywords: Jamaica, environmental instruments, policy, pollution.
REVENUE GENERATING INSTRUMENTS
Andersen, M.S., 1991. Green Taxes and Regulatory Reform: Dutch and Danish Experiences in Curbing with Surface Water Pollution. Berlin: Wissenschaftzsentrum Berlin für Sozialforschung (WZB). 36p.
A comparative study is made of the Dutch and Danish efforts to curb surface water pollution. The analysis is performed within the context of two decision-making paradigms. A distinction is made between the means available for environmental protection and the organisational framework in terms of the agent employed as responsible for the implementation. In both cases the agent and means are initiated by the regulating state, so the distinguishing factor is whether the agent and means are operated on market terms or on public sector terms. Perhaps the most pertinent finding of this paper is that traditional command-and-control strategies impede rather than foster the sustainable development of industrial society.
Keywords: water pollution, regulations, command-and-control, market incentives, responsive regulatory paradigm.
Baldock, D., & Bennet, G., 1991. AGRICULTURE: A Study of Six EC Countries. London: Institute for European Environmental Policy (IEEP). 231p.
Substantial proportions of agricultural pollution costs have been born by other sectors because agriculture has succeeded in escaping the full impact of the Polluter Pays Principle (PPP). The book analyses agricultural pollution control, with reference to the PPP. It includes six case studies: Denmark, The Federal Republic of Germany, the Netherlands, Belgium, France and the United Kingdom. Based on this analysis the authors found that variations exist in every country and within regions of the same country in economic, political and institutional factors which influence the cost of controlling environmental impacts caused by agriculture. They conclude that the difficulties raised by non-point pollution sources and administrative problems limit the extent to which the PPP can be applied in the agricultural sector.
Keywords: agriculture, polluter pays principle
Barthold, T.A., 1994. Issues in the Design of Environmental Excise Taxes, Journal of Economic Perspectives 8 (1) pp. 133-151.
Economic theory suggests three rationales for employing the tax code as a tool of environmental policy. First, taxes can be assessed as user fees and earmarked according to the benefit principle of taxation. Second, taxes can be assessed as insurance premium against potential environmental risks. Third, the tax code can be used to deliver Pigouvian subsidies or impose Pigouvian taxes on polluters. There are two problems with taxation, however. Environmental taxes often deviate from economic theory (and are, thus, inexact); and governments have more frequently used environmental taxes to fund insurance pools or to assess benefit taxes rather than imposing Pigouvian taxes. These problems usually involve a lack of clear identification of costs and benefits and lack of information about tastes, technology and regional impacts. In addition, taxes must compete in the political arena with other environmental tools.
Keywords: Pigouvian taxes, policy goals
Bernow, S.S., et al. 1993. Trash, Traffic and Taxes: Elements of Market-based Pollution Policy. Boston: Tellus Institute. 87p.
The general logic of pollution taxes, and the applicability of taxes to the problems of waste management and vehicle use are examined. A series of questions encompassing the following are answered: What can be accomplished through pollution taxes? What is the rationale for such taxes? What is the appropriate way to structure them? and What are their limitations as instruments to realise environmental goals? Pollution taxes can ensure that polluters pay and that cost-effective pollution reduction will ensue. But the measurement of environmental problems is a complex undertaking and thus, complex environmental issues will require multi-dimensional policy responses. In the case of solid waste management it is recommended that incentives for waste minimisation and hazard reduction are created to tackle the problem at the producers', consumers' and disposal facilities' end. cost-effective pollution reduction in the transportation sector will likely involve a combination of standards, economic incentives, and programmatic instruments.
Keywords: transportation, solid waste management, pollution taxes, regulation, environmental policy.
Bernstein, J.D., 1993. Alternative Approaches to Pollution Control and Waste Management: Regulatory and Economic Instruments. Washington D.C.: The World Bank. 64p.
The purpose of this paper is to present an overview of the most common strategies and policy instruments (regulatory and economic) used in developed and developing countries to achieve pollution control and waste management objectives. The discussion does not centre around what instruments should be used but rather looks at how policy instruments are being used. Standards, permits and licenses, land and water use controls, pollution charges, market creation, subsidies, deposit-refund systems, and enforcement incentives are all looked at in the context of water pollution and protection, air pollution, land use, and solid and hazardous waste management. The findings show that few in depth evaluations have been conducted in developing countries but that experience in developed countries can be drawn upon when planning environmental strategies for developing countries. The fundamental challenge will be to determine the most appropriate mix of instruments by taking into account such factors as desire for economic efficiency; compatibility with existing administrative, political, and judicial frameworks, economic conditions and tax structure; political acceptability of instruments; complexity of application; ease of monitoring and enforcement; consistency with overall environmental policy; and compliance with relevant international agreements or principles.
Keywords: pollution, solid waste, hazardous waste, economic instruments, regulation, developed and developing countries.
Bratton, T.J., 1994. Raising Revenue to Support Waste Services, Gersham, Brickner & Bratton Inc., Falls Church, Va June 1994 pp. 51-53.
Tipping fees and user charges are no longer sufficient to cover the cost of solid waste management due to the recession and the leakage of waste to lower-cost alternatives. The revenue shortfall can be eliminated by applying more predictable methods of raising revenue which are founded on the concept that the one who generates the most waste pays the highest fees. This article lists the various aspects which need to be taken into consideration when designing a new system of equitable and predictable charges. It then goes on to discuss a variety of variable rate or volume- or weight-based fees such as tipping fees, improved lot assessment, generator assessment, sticker fees, and impact fees. By shifting from a tipping fee and property tax-supported structure to a mix of different fees and charges can dramatically impact upon a community.
Keywords: waste management, fees, charges.
Clément, P., 1992. Environmentally Perverse Government Incentives. Working Paper No. 6. Ottawa: National Round Table on the Environment and Economy. 22p.
Government incentives in most sectors have the potential to benefit or damage the environment. The fundamental question about government incentives is whether, in the short- and in the long-term, they serve their purpose: to stimulate environmentally sustainable economic growth. Because the topic is so broad, the agricultural sector in Canada has been chosen as an illustration of government incentive policies in general. Subsidies, taxes and regulation are discussed generically and then in the context of agriculture. Technical details of the environmental impact of such incentives is provided and recommendations are put forward.
Keywords: agriculture, environment, incentives, taxes, subsidies.
Department of the Environment, 1990. Market Mechanisms: Charging and Subsidies. London: Environmental Resources Limited. 91p.
This work is intended to provide a framework for evaluating existing and proposed schemes for charging and assistance for pollution control purposes in the UK context, and examine the implications of other countries' systems for international competition and trade. It contains a broad review of the main charges and subsidies in place in Europe, and examines key trends and recent developments. Studies cover the UK, Germany, France, the Netherlands, Italy, Sweden, Norway, Denmark, Spain and Japan. The systems are reviewed and analysed on the basis of their value and effectiveness in both modifying polluters' behaviour and as a revenue source. In the process factors which make for the success or failure among charging and subsidy schemes are identified.
Keywords: air and water pollution, carbon emission, charges, subsidies.
Comments:
This report is also accompanied by a separately published report which summarises the principle findings in 27 pages.
Dower, R.C., & Zimmerman, M.B., 1992. The Right Climate for Carbon Taxes: Creating Economic Incentives to Protect the Atmosphere. Washington D.C.: World Resources Institute. 38p.
A compelling case is made for using carbon taxes to meet the goals implied by the Climate Treaty. Carbon taxes are the least costly way to encourage carbon-dioxide reductions from the economy. By forcing energy prices to reflect the risk of climate change, carbon taxes would create economic incentives to use less-carbon-intensive fuels and products. Properly set, carbon taxes would encourage the cheapest reductions first to ensure that reductions are achieved as cost effectively as possible. In comparison with alternative approaches, carbon taxes are comprehensive and flexible, allowing the market to choose where and how reductions will occur. Moreover, carbon taxes would spur technological innovation in the way energy is used and supplied.
Dower and Zimmerman argue that carbon taxes would benefit the U.S. economy as a whole, if adopted as part of an overall shift of the tax burden toward things to be discouraged, such as pollution, and away from things to be encouraged, such as work and savings. Carbon taxes would cause some energy prices to rise. The authors detail ways to cushion the added expense.
Keywords: carbon taxes, economic consequences, distributional consequences.
Drescher, U.M., 1993. Taxes as Instruments of Environmental Policy: With Emphasis on Air and Water Pollution. New York: Pace University School of Law, Centre for Environmental Legal Studies. 86p
A set of criteria are established for the evaluation of environmental taxes after which the document focuses on the application of taxes on air and water pollution in different European Countries, the United States of America and Japan. It includes air pollution taxes in the United States, taxes on CO2 emissions in Sweden, Denmark, Norway, Finland, Switzerland, and Japan. Part III centres on water quality and includes examples of the application of effluent charges in France, Germany, Italy, and the Netherlands. Part IV gives examples of other environmental taxes such as: Norway noise tax on aircraft landings; and Denmark charges per cubic meter on the extraction of sand and gravel for building construction, on beverage containers, and on disposable tableware.
Keywords: water pollution and air pollution, environmental taxes, carbon emission, criteria.
Environment Council of Alberta, 1993. Discussion Paper: Economic Instruments for Waste Reduction. Edmonton: Environment Council of Alberta. 26p
High volumes of garbage , diminishing capacity of current landfill sites, resistance to new landfill sites and increasing disposal costs are making the garbage issue increasingly difficult to resolve. "Economic Instruments for Waste Reduction" is a project which deals with the use of fees, charges and incentives to reduce the amount of municipal solid waste being land-filled. Its intention is to identify financial incentives and inducements that can encourage or cause a change in behaviour and remove barriers leading to waste reduction in accordance with the principle of the four R's (reduce, reuse, recycle or recover). The aim of this report is to increase public and government understanding of the "real" costs of waste, how instruments work in different Alberta jurisdictions and how various waste commodities are unique in their own right, and therefore, require different management and reduction techniques.
Keywords: Alberta, municipal solid waste, fees, charges, financial incentives, the four R's.
General Agreement on Tariffs and Trade, 1994. Work Starts on Environmental Charges, Taxes and Product Requirements, Trade and the Environment: News and Views from the General Agreement on Tariffs and Trade 11 October 1994. 10p.
A meeting of the Sub-Committee on Trade and Environment began its work on 15-16 September 1994. The topic under discussion was the relationship between the provisions of the multilateral trading system and (a) charges and taxes for environmental purposes, and (b) requirements for environmental purposes relating to products, including standards and technical regulations, packaging, labelling and recycling. The views expressed by the delegations at the meeting were that environmental product taxes and charges are an efficient form of policy intervention to tackle environmental externalities. Environmental externalities can be classified in one of four ways: local production externalities; local consumption externalities; global/transboundary production externalities; and global/transboundary externalities. New Zealand gave a thorough analysis of the effects of taxes and charges on these externalities. Various other delegations raised issues of competitiveness, effectiveness, feasibility and sovereignty. Most delegations felt that the best way of proceeding on the issue would be through a case-study approach in order to formulate some general conclusions and recommendations.
Keywords: GATT, charges, taxes, environmental protection, trade, environmental product requirements.
Grut, M., Gray, J.A., & Egli, N., 1991. Forest Pricing and Concession Policies: Managing the High Forests of West and Central Africa. World Bank Technical Paper No. 143. Washington D.C.: World Bank. 77p.
Proper pricing supported by new concession policies can encourage and support sustainable management and conservation of the forests of West and Central Africa. At present, forest revenues are generally very low compared to what they could be, because of low collection rates and forest fees. Both put an unrealistically low price on forests and encourage waste. The study recommends an annual concession rent to replace the present multiplicity of forest fees, which are often not collected. Forest management plans for each concession area, prepared in consultation with local communities, should be the main forest-management tool. Poor forest management performance should lead to fines or cancellation of the concession contract.
Keywords: tropical moist hardwood forests, forest fees (stumpage, area-based, silvicultural, environmental, concession, stamp etc.), West/Central Africa, pricing system.
Golub, A.A., & Gofman, K.G., 1993. Economic Mechanisms for Controlling Global Natural Processes, Matekon Fall 1993 pp. 14-26.
Ecological deterioration is taking place on a global scale and so the questions which need to be answered are: what is the meaning of ecological stability, and what is the socio-economic price of this stability? Essentially this amounts to the ecological safety of socio-economic development. What needs to be done is to expand human activity which reduces environmental risk and to inhibit activity which adds to environmental degradation. The nature of the task requires the need to combine economic and administrative means of controlling harmful influences which are leading to global change. These two aspects are discussed with reference to pollutants such as CO2, freons, SO2 and NOx in Russia. The results are extrapolated to apply in a global context.
Keywords: Russia, global climate change, taxes, emission trading, polluter pays and victim pays principle.
Halkos, G.E., 1993. Sulphur Abatement Policy: Implications of Cost Differentials, Energy Policy October 1993 pp. 1035-1043.
Acid rain is a global problem in that pollution emissions may be deposited anywhere in the world, including the country of origin. Being the product of sulphur emissions, this externality needs to be treated with some kind of regulation whether it be policy instruments (command and control) or economic instruments (market incentives). The paper compares the costs of meeting a given set of uniform sulphur abatement targets by the imposition of a uniform charge and differentiated charge rates. These results are compared with the cost of meeting the same targets though the use of standards in the form of critical loads. This enables us to assess empirically if economic instruments work better than regulations in reducing sulphur emissions at source. It is concluded that some kind of international co-operation is necessary and that economic incentives are the most effective in achieving targets because costs of reduction are not uniform for all polluters under a system of regulation.
Keywords: sulphur abatement, regulations, taxes, global warming.
Johnson, P., McKay, S., & Smith, S., 1990. The Distributional Consequences of Environmental Taxes. London: The Institute for Fiscal Studies. 55p
As with all environmental policies that require changes in the way that business and individuals behave, environmental taxes do incur additional expenses. The costs of changing to more expensive production methods, or to products that, initially, appear to offer value for money, are common to both the regulatory and taxation approaches. However, taxation involves further costs, in the form of the tax revenues paid by each business or individual. Concerns that have been expressed over the impact of environmental taxes on the income distribution, or on the living standards of the poor, are especially concerned with the pattern of these extra tax payments.
Two questions are asked in this paper: how would the extra tax burden on households resulting from environmental taxes be distributed across different income groups? What means are available to compensate poorer households and other vulnerable groups for the increase in their tax burden. In order to answer these questions, the effects on households of higher prices for domestic energy, vehicle fuels and food are traced. In each case, the chapter begins with a descriptive analysis of the pattern of households spending on the goods in question, followed by a simulation of the effect of higher prices, using the IFS Simulation Program for Indirect Taxes.
Tax instruments are preferred to a conventional regulatory approach for environmental pollution because the former allows firms and individuals to choose to reduce pollution where the cost of doing so represents a saving. Moreover, taxes provide a continuous incentive to develop less polluting products and processes, whereas regulations tend to encourage only minimum compliance.
Keywords: environmental taxes, distribution, compensation, energy, transport, food.
Related Sources:
DeWitt, D.E., Dowlatabadi, H., & Kopp, R.J., 1991. Who Bears the Burden of Energy Taxes? Discussion Paper QE91-12. Washington D.C.: Resources for the Future. (This study examines the distributional effect of a carbon tax on four major fuels - electricity, gas, oil, and gasoline - on the American household.)
Khazzoom, J.D., 1991. The Impact of a Gasoline Tax on Auto Exhaust Emissions, Journal of Policy Analysis and Management 10 (3) pp. 434-454.
Exhaust emissions control is implemented by the EPA via a tax imposed on grams of pollutants per miles travelled. However, travel is an activity which people do not willingly forfeit, thus a substantial tax would have to be imposed before it has any significant effect on the level of emissions. If, however, EPA specified its standards in terms of grams of pollutant per gallon of fuel, the same result could be achieved with a much lower tax. This conclusion is reached after examining the results of estimates in the reduction of emissions for the two regimes in question.
Keywords: emissions, transport, gasoline tax, air pollution.
All estimates of the total costs of carbon reductions to society are strongly influenced by the types of policies through which these reductions are to be achieved. However, conflicting results are regularly obtained when the costs of implementing certain policies are analysed. Krause ascribes this to the fact that two different, and competing, paradigms of analysis are used viz. the top-down approach and bottom-up assessments. This study determines which approach is most suited to a specific policy problem. Twelve pertinent top-down and bottom-up approaches are summarised in terms of the cost (or benefit) of carbon reductions, the carbon taxes needed to achieve emissions reductions, the application of fiscal and non-fiscal policies, and the specific modelling methods and sensitivity analyses used in each.
Keywords: carbon reductions, costs, policy, top-down, bottom-up.
Mauch, S. and Iten, R., 1991. Ecological Tax Reform, Case Study Switzerland (unedited draft). Zürich: Interdisciplinary Consulting Group for Natural Resources and Infrastructure Management (INFRAS). 20p.
Switzerland forms the basis of a study on ecological tax reforms. Since change takes decades to be completed, static thinking needs to be replaced with dynamic and process-oriented perceptions. Thus a dynamic energy tax on all non-renewable energies forms the cornerstone of the system. Revenues are re-allocated to the private economy, partly to industry and partly to households, since they are not intended to increase the state budget and activities. Arguments against the proposed tax reforms are counteracted. Various motives for resisting environmental charges and taxes are brought to the reader's attention in order to elicit dialogue in this area.
Keywords: Switzerland, ecological taxes, tax incidence.
Migué, J-L., & Marceau, R., 1993. Pollution Taxes, Subsidies, and Rent Seeking, Canadian Journal of Economics 26 (2) pp. 355-365.
Migué and Marceau show that environmental taxes and subsidies are not as effective as some studies have shown because the aspect of rent-seeking has not been taken into account. Rent-seeking results because of ill-defined property rights. Subsidies are typically granted to an open class of polluters in such a manner that potential industrial concerns are rewarded to enter the industry and to use the water pool (for example) as a waste disposal outlet. Competition for the appropriation of these subsidies take the form of excess entry. Thus, rent-seeking activities by potential polluters are encouraged. With incomplete ownership of resources, wealth dissipates. The extent of this dissipation will vary according to the specific incentives created by the taxes and subsidies adopted. Revenues raised by market prices to polluters, on the other hand, are assigned to a closed class of entities as private property so that one can only become a resource user by first purchasing the right from current users. Rent-seeking is rule out because there is no expected return from this zero-sum game. Hence, market al.location of environmental resources is the superior solution.
Keywords: pollution taxes, subsidies, rent-seeking, property rights.
Pressure for change in European farm policy stems from a realisation that the current system of agricultural support is untenable on three fronts, viz. financially, on trade grounds and environmentally. Forests, on the other hand, are a stock of natural capital which is able to bridge the divide between the economy and the environment. To do this, they need to be correctly priced which the market is unable to do. This suggests a need for public intervention and a new method of taxation. This review can be regarded as a cursory survey of certain elements of the current regime where moderate reform could yield environmental benefit or promote conservation interest.
Keywords: agriculture, forestry, taxes.
Muller, F., 1992. Air Pollution Tax for Maryland: Questions and Answers. Maryland: Centre for Global Change. 7p.
A questions and answer format is used to discuss the Maryland proposed air pollution tax; its merits and some of the concerns about the imposition of that tax. Some of the questions answered in this document include: what is a pollution tax?, how does the air pollution tax work?, why should Maryland introduce an air pollution tax?, what is the tax rate?, who pays the tax?, how much revenue will the tax raise?, and have similar taxes been proposed in other jurisdictions?. It is concluded that an air pollution tax passes four tests: it is economically responsible, socially just, politically achievable and it promotes a sustainable environment.
Keywords: Maryland, pollution tax.
Related Sources by the Same Author:
Muller, F., & Hoerner, J.A., 1993. The Promise of State Carbon Taxes: Opportunities and policy Issues. Maryland: Centre for Global Change. 16p.
Ontario Government: The Environment and Taxation Working Group of the Ontario Fair Tax Commission, 1992. Final Report -- Environment and Taxation. Toronto: Fair Tax Commission. 56p.
The working group states the belief that environmental tax instruments can help Ontario realise its environmental objectives. The Final Report builds upon earlier recommendations by including the following principles in an environmental tax regime: revenue should be earmarked to advance environmental objectives; environmental tax instruments should complement direct regulations; and the "Polluter-Pays Principle" should be used to ensure that environmental costs are reflected in the price of goods and services. Subgroups on Health/Freedom from Toxins, Energy, and Natural Resources conduct investigations into the workings of taxation instruments in their sector of study and make recommendations for future processes in this area. A summary of recommendations according to subgroup completes the report. Recommendations for future process on environmental tax instruments are also put forward.
Keywords: environmental costs, environmental tax instruments, energy, natural resources, agriculture, fees, deposit-refund system.
Organisation for Economic Co-operation and Development, 1992. Climate Change: Designing a Practical Tax System. Paris: Organisation for Economic Co-operation and Development. 271p.
A Framework Convention on Climatic Change was signed at Rio de Janeiro in June 1992 which focuses on reducing greenhouse gas emission. Consequently, world attention is now focused on how such abatement should be carried out. The reports contained in this volume were prepared under the 1991 Climate Change activity of the OECD Environment Committee. The document comprises 14 chapters about proposals for CO2 taxes in Europe, Japan and the USA From designing a practical tax system for greenhouse gas emission abatement, to a review and comparison of CO2 taxes in the Nordic countries and an overview of proposal for CO2 taxation in Switzerland (as well as many other issues), the authors discuss a variety of environmental tax systems, all issues for OECD countries.
Keywords: emissions, carbon taxes, fees, emission trading, case studies, international dimension.
Related Sources by Same Author:
Organisation for Economic Co-operation and Development, 1993. Taxing Energy: Why and How. Paris: Organisation for Economic Co-operation and Development. 176p. (Energy taxes in Austria, Denmark, Germany, Japan and the United States are studied to examine why and how energy is being taxed. A concise list of definitions at the end of the document includes pertinent terms like harmonisation; internalisation, and tax neutrality.)
Organisation for Economic Co-operation and Development, 1992. Market and Government Failures In Environmental Management: The Case of Transport. Paris Organisation for Economic Co-operation and Development (OECD). 90p.
The main objective of this report is to provide a clarification of the distinction between market and government intervention failures and to examine the relevance of this distinction in the specific context of land-based transport. Such failures extend to all modes of transport, but the dominance of land-based transport coupled with the nature of the particular problems it generates, makes it an especially important area of concern. It is also the area of transport activity that exhibits the greatest variety in the forms of government intervention. This study incorporates work undert
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