The Use of Economic Instruments in Environmental Policy: Opportunities and Challenges

by Doug Koplow

Jan 1, 2004
This report aims to provide policy makers, especially in developing countries, with practical guidance on deciding which types of economic instruments (EIs) are likely to work in addressing specific environmental problems. It describes how EIs modify incentives to pollute, the process of introducing EIs into the existing policy regime, the supporting conditions needed for them to work, and the potential effects of EIs on important societal factors such as poverty and sustainable development. The paper also introduces a number of template-based tools to assist policy makers assemble disparate data in a more efficient and structured way. These tools will enable policy makers to refine their understanding of a particular environmental challenge, to more quickly identify appropriate policy options, and to more effectively tailor these solutions to local conditions.

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