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Policy Instruments for Environmental Regulation

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Extended Producer Responsibility (EPR)

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EPR is a policy approach in which producers are responsible for the entire lifecycle of their products, particularly for their take-back, recycling, and disposal. An example is the packaging regulations in Germany.

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Environmental Impact Assessment (EIA)

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EIA is a process that requires developers to follow a process to evaluate the environmental consequences of their proposed actions before commencement. An EIA is required in many countries before major projects are approved.

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Carbon Tax

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A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). For example, in 2019, Canada imposed a federal carbon tax starting at 20pertonneofCO2emitted.20 per tonne of CO2 emitted.

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Command and Control Regulation

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Command and control regulation involves government-imposed limits and controls on business practices, such as setting specific pollution limits. The US Clean Air Act includes such regulatory provisions.

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Product Bans

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Government-imposed prohibitions on the manufacture, sale, and use of certain products deemed harmful to the environment, such as certain pesticides or chemicals like DDT.

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Pollution Taxes

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Pollution taxes are levied on the emission of pollutants, aiming to internalize the external cost of pollution. An example is Sweden's tax on NOx emissions from power plants.

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Payment for Ecosystem Services (PES)

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PES involves payments to landowners for managing their land to provide some sort of ecological service. Costa Rica's PES program compensates landowners for forest conservation.

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Green Certificates

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Green Certificates are tradable assets that certify electricity has been generated from renewable energy sources. An example is Renewable Energy Certificates (RECs) in the United States.

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No-Net-Loss Wetlands Policy

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This policy aims to ensure that the total area of wetlands does not decrease by requiring restoration, creation, or enhancement of wetlands as compensation for permitted losses. The USA's Clean Water Act embodies this principle.

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Feed-in Tariffs (FITs)

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Feed-in Tariffs are guaranteed prices at which producers can sell renewable electricity to the grid. Germany's Renewable Energy Act of 2000 is an important example.

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Green Public Procurement

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Green Public Procurement is the practice of procuring goods and services with reduced environmental impact. The EU has been implementing this through its Green Public Procurement Policy.

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Cap and Trade

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A cap and trade system sets a maximum level of pollution (cap), issues permits for emissions up to that cap, and allows companies to buy and sell the permits. An example is the European Union Emissions Trading Scheme.

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Bottle Bills

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Bottle bills are legislation that requires a refundable deposit on beverage containers to encourage recycling. Oregon's Bottle Bill was the first of its kind in the US.

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Voluntary Environmental Agreements

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Voluntary Environmental Agreements are cooperative agreements between government and industry to achieve environmental goals, often in lieu of regulation. The 1991 US EPA's 33/50 Program targeted a voluntary reduction in the release of certain toxins.

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Subsidies for Renewable Energy

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Subsidies for renewable energy involve financial assistance from the government to support the development and use of renewable energy sources. For instance, the US Production Tax Credit for wind power.

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Emission Performance Standards

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Emission Performance Standards set limits on the amount of specific pollutants that can be emitted from particular sources. An example is the limits on NOx and SO2 emissions from power plants.

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Water Quality Trading

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This policy allows entities to exceed discharge permits by buying credits from others who have reduced their pollution below permitted levels. An example is the Chesapeake Bay Watershed Nutrient Trading in the United States.

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Single-Use Plastic Bans

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These are laws that prohibit the manufacture, sale, and use of single-use plastics to reduce pollution. An example is the European Union's directive to ban single-use plastic items by 2021.

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Natural Resource Damage Assessment

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This policy tool is used to estimate the cost of harm to natural resources, leading to compensation by those responsible for the damage. The Deepwater Horizon oil spill led to a major damage assessment and restoration effort.

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Energy Efficiency Standards

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These are requirements that set specific performance standards for energy consumption. Examples include the Corporate Average Fuel Economy (CAFE) standards for vehicles in the USA.

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