Conclusions

Increasingly governments are being asked to strengthen their commitment to environmental protection and sustainable development. Economic instruments offer governments a way of meeting these commitments. Consequently, they are now being used in conjunction with government regulations. With increased use, the number of economic instruments and innovation in their application has also burgeoned. Furthermore, focus has shifted from using them to generate revenue to cover clean-up costs, to using them as incentives for individuals to change their behaviour.

Trends (as seen in the matrix of instruments) show that certain categories of instruments have been discussed in certain sectors - as is the case with taxation and energy use. However, application of instruments within some other sectors, such as renewable resource management and the international arena, is still limited. The use of economic instruments on a global level is being discussed, though, since many environmental problems do not heed national borders and have drawn attention to the need for some harmonisation of policy.

An emerging development in this field is the transition from instruments for environmental protection to instruments for sustainable development. However, there is a great need for more practical application of economic instruments for sustainable development. As well, some empirical analysis of what works and what does not and which instruments are most effective in reaching their goals would be useful.

Economic instruments in this discussion have been categorized according to the impact that they have on a government's budget. Governments now have more options at their disposal for using instruments that have a neutral effect on their budgets. As it becomes less and less politically acceptable for governments to run a deficit this will become all the more important.