1 Overview

1.1 Selection criteria

  • Will the instrument meet an aim with certainty and in a reasonable timeframe?

    • There isn’t always agreement regarding what the aim of environmental policy is. It may be introduced on deontological grounds e.g. making polluters pay, or teleological grounds e.g. improving welfare, improving environmental quality, or human health. 

    • Aim for Ecological Perspective (Ecological Effectiveness) - Reduction of damage to ecosystem.The level of use which ensures that ecosystem health (ability to provide a flow of ES, to maintain vital signs, handle stress and recover after perturbations), integrity (capability of supporting and maintaining a balanced, integrated, captive biological system with the full range of elements (genes, species), diversity, and processes (mutation, demography, biotic interactions) expected in a natural habitat of a region are sustained (Ervin et al. 2003) without so much consideration of costs of abatement - zero-ecological risk level. Often linked to the precautionary principle relating to critical natural capital, preventing thresholds, irreversibilities. A level with some amount of perceived to be reasonable damage may otherwise be permitted.

    • Aim from Economic Perspective (Economic Efficiency)

      • Static efficiency:

        • Allocative efficiency: Achieving a level of pollution that moves the economy towards a more optimal distribution of goods, services and pollution in light of consumer’s preferences, and which can be found at the intersection between MAC & MDC

        • Cost efficiency: Next, is the policy option the most cost effective out of the options available i.e. are the net economic benefits of intervention maximized - benefits maximized or costs minimized - Choose option which has the ability to achieve the socially efficient level of environmental use (allocative efficiency) at least cost by optimizing the tradeoff between production and conservation through allocating abatement across companies most efficiently given current resources/technologies. In addition to focussing on abatement and compliance costs from the perspective of the regulatee, administrative costs from the perspective of the government can also be accounted for here (made up of administrative, compliance and enforcement costs), which can also be offset by revenues generated by an instrument (measured by subtracting from aggregate net benefits administration costs). 

    • Political feasibility - Important aspect of moving from theoretical to actual benefits is whether an instruments is politically feasible - in terms of putting the policy into practice, monitoring and enforcing it in a given context, and with affordability an important aspect of this.

  • Will that aim be persistently met into the future, robust under changing circumstances (including new information) and enable and encourage continued improvements beyond the minimum?

    • Longevity and robustness - effectiveness under a variety of circumstances

    • Dynamic Efficiency — concerned with changes in efficiency and costs through time via learning and improvements in technologies, and achieved when instruments provide incentives for continuous innovation to lower the cost of achieving goals over time, while also being resilient to changing technologies, prices and climatic conditions. The instrument being able to respond to new information regarding MDCs, MACs and unintended consequences (Fiorino, 2004).

  • What are its distributional effects and will it have no negative regressive effects, or even positive?

    • Either a motivation behind regulation or something to consider — how does the instrument impact different people, and in doing so exacerbate pre-existing inequities (Bryant and Bailey, 1997).A long concern thatenvironmental policies caused disproportionate costs to those who were poorer, while disproportionately rewarding those already richer. Instruments shouldn’t favour particular groups or harm those already relatively disadvantaged i.e. be regressive. Distribution can be assessed in terms of income/wealth, or across other vectors e.g. race, gender or geography (Johnstone and Serret, 2006).

  • What are its positive and negative spillovers?

    • This includes: 1) soft effects such as impacts on attitudes, awareness and learning, whether positive or negative; 2) wider economic impacts; and 3) perverse incentives and consequently unanticipated negative impacts e.g. the IMO’s 2018 ship emissions regulation leading to owners installing equipment helping meet required atmospheric emissions but only by discharging effluent into the ocean rather than atmosphere.

1.2 Cross-cutting instruments

1.2.1 Target-setting

Strategically guide the market towards desired outcomes and hold the government to account for this. Despite prevention and reuse being environmentally preferable to recycling due to energy savings in the production phase and raw material usage (expect when inefficient products remain in service), the WEEE Directive has focussed on targets for recycling.