Tax and trading play increasing role in protecting environment
Market-based instruments are playing an increasing role in reducing damage to Europe's environment.This is according to a new report issued by the European Environment Agency which aims to demystify MBIs and explain their often-arcane mechanisms to the layman.
The report, Using the market for cost-effective environment policy - market-based instruments in Europe, was released at a meeting of high-level economists at the EEA's headquarters in Copenhagen.
The report is based on the premise that much environmental pollution and depletion of finite natural resource comes from incorrect pricing of the goods
and services we produce and consume.
It argues that MBIs such as taxes, subsidies and tradable permits are increasingly being used to provide a vital economic incentive to helping the environment.
Real economic costs can be tied to environmental damage and it is often those who are not benefiting from the use of the products causing the impact who are footing the bill, says the report, giving the example of unborn generations, the Arctic people on the receiving end of Europe's pollution, the poor who are obliged to live in industrial areas where accommodation is cheap and city pensioners who do not own cars.
The report looks at the political obstacles that can derail MBIs and also provides a check list of what makes an effective MBI.
Among the suggestions in the report are :
The full report can be found on the EEA's website.
By Sam Bond
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