Economic Instruments

To further stimulate the drive to safer substitutes, a fee could be levied on users of all authorised chemicals. This fee could be used to centralise and disseminate information on alternatives, and fund research. At the same time, any direct or indirect subsidies and tax exemptions to the chemical industry should be withdrawn. 

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Bernstein, Janis D. Alternative Approaches to Pollution Control and Waste Management Regulatory and Economic Instruments. Washington The World Bank, 1993. 

R 95 - Recovery, Recycling, Re-Integration. Volume 1 Concepts, Life Cycle Analysis, Legal and Economic Instruments. Conference proceedings. 

Carbon taxes are dynamic economic instruments that offer a continuum incentive to reduce emissions. In fact, technological and procedural improvements and their subsequent efficient diffusion lead to reductions in tax payment. In addition, trading systems are able to self-adjust because emission goals will be easier to meet there will be a decrease in permits demand and in their price but not as rapidly as taxes. 

A relevant role could be played by the insurance sector in the choice of political economic instruments for climate change. 

In the past few years, the insurance industry has developed financial products suitable for dealing with climate change-related risks in the direction to play a role far beyond simply compensating climate change s victims for their losses ex post. The activity of the insurance has become relevant as a political economic instruments within an ex ante strategy to financially manage large-scale catastrophes, as a complement of ex post instruments for the compensation of disaster losses. 

Grant-Muller S (2004) Study of Policies regarding Economic Instruments Complementing Transport Regulation and the Undertaking of physical Measures (SPECTRUM) deliverable 6. The report can be downloaded from http //www.its.leeds.ac.uk/projects/spectrum/downloads/ D6.pdf... 

Helm, D., 2005. Economic instruments and environmental policy. Economic and Social Review 36(3), 205-228. 

The Economic Instruments database, created in close collaboration between the OECD and the EEA, contains information on the use of economic instruments such as environmentally-related taxes and charges, environmentally motivated subsidies, tradable permits, and deposit refund systems. It also outlines voluntary policy approaches such as environmental agreements negotiated with industiy, and public programs in which firms can volunteer to participate. 

In considering economic instruments, what are reasonable prices to pay for emissions The economic detriment due to risks can be calculated using a series of assumptions (Spadaro and Rabl 2004). In two examples, the assumed numbers are 10,000 Euros per lost IQ point and 2 million Euros per case of cancer, corresponding to 6,000 Euros... 

Directly, the cost calculations can be a basis for restricting emissions using economic instruments such as emission fees or trading of emission permits. This might, for instance, have important applications for emissions of dioxins and other substances from combustions. The examples above indicate that the costs of a detriment can be substantial in relation to the value of the product, which is usually in the range of 1-10 Euros per kg. Consequently, such economic instruments might be expected to lead to substantial reductions in emissions. 

Scope for the use of Economic Instruments for Selected Persistent Pollutants, Final Report prepared for the Department for Environment, Food and Rural Affairs, RPA, London, UK, 2002. 

Tomas Chmelik, M.Sc. in economics (University of Economics, Prague) is Director of the Climate Change Department, Ministry of Environment of the Czech Republic. After completing his M.Sc. degree, with major specialisation in public administration and minor specialisation in environmental economics he started to work for the Ministry of Environment, Department of Environmental Economy, Unit of Economic Instruments with responsibility for economic instruments in air,... 

Economic instruments have been used at times by governments in order to encourage greater environmental responsibility by individuals or companies ... 

In order to achieve that objective a variety of tools - both voluntary and mandatory - can be used such as economic instruments (e.g., funding, fees), substance bans, voluntary agreements, environmental labelling and product design guidelines. The application of principles of hfe-cycle analysis for additives clearly indicates that raw materials, energy and pollution from renewable resources are preferred when compared to petrochemically based processes and products. 

Member states are left free to define the responsibilities under this Directive. They are also free to employ economic instruments or deposits if they so wish. 

Europe is, and will remain, at the leading edge of battery waste management. The European Union is keen to see the expansion of battery collection and recycling and continues to propose new legislation in an attempt to harmonise efforts across Europe. It would appear however that because the Member States remain free to be able to impose economic instruments or deposits at will, and the Directive fails to define individual responsibility, it is unlikely to achieve this aim. 

Whereas recourse to economic instruments such as the setting up of a deposit system may encourage the separate collection and recycling of spent batteries and accumulators ... 

Member States shall ensure the efficient organization of separate collection and, where appropriate, the setting up of a deposit system. Furthermore, Member States may introduee measures such as economic instruments in order to encourage recycling. These measures must be introduced after consultation with the parties concerned, be based on valid ecological and economic criteria and avoid distortions of competition. 

Member States may, in accordance with the principles governing Community environmental policy, inter alia, the polluter-pays principle, adopt economic instruments to promote the achievement of the objectives of this Directive. Member States shall ensure that these instruments do not distort internal market and competition rules. 

Member States shall communicate to the Commission the draft measures which they intend to adopt concerning the use of economic instruments to achieve the objectives of this Directive. 

Tietenberg, Thomas. (1990). Economic instruments for environmental regulation. 

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