The United States Experiences with Economic Incentives for Protecting the Environment

Jan 1, 2001
Because of the wide -- and growing -- use of economic incentives at all levels of government in the United States, it is important to understand them more clearly. For example, what kinds of economic incentives are being used today to address what kinds of problems? Are particular incentives better suited for use at specific levels of government? Even more important are questions regarding relative effectiveness. How well have economic incentives performed in terms of improving environmental quality? How economically efficient and cost-effective have they been? To what extent have they stimulated technological change and innovation? How can past experience with economic incentives help improve their use today and in the future? This report attempts to answer those questions by providing a broad overview and analysis of the current use of economic incentives as an environmental management tool in the United States. To that end, it makes use of, and builds on, related reports, surveys, and research. This report expands and updates the information contained in an earlier EPA report (1992) and a report to EPA in 1997 that documented the growing use of economic incentives in the United States and foreign countries. It also notes related research by the National Academy of Public Administration (NAPA).


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