Published in:Chapter 10, p. 218-262 in: Environmental Law in Development: Lessons from the Indonesian Experience, Michael Faure & Nicole Niessen (eds.), Cheltenham, Edward Elgar, 2006
Extent:
1 Online-Ressource (46 p)
Language:
English
DOI:
10.2139/ssrn.2361420
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments November 29, 2013 erstellt
Description:
In this contribution Michael Faure, Marjan Peeters and Andri Wibisana discussed the question whether economic instruments, also referred to as marketable instruments, are also suited for developing countries. The classic arguments concerning the shortcomings of command and control instruments are discussed as well as the potential advantages of market-based instruments in controlling environmental pollution. Then the theory concerning environmental taxation as well as concerning emission trading is explained and attention is paid to a comparison of regulation, marketable permits and taxes. Also some practical experiences with the way in which marketable permits and environmental taxes have reduced emissions are presented as well. In addition to this public interest analysis attention is also paid to the so-called private interest analysis, showing that in some cases private interest may affect the choice of instruments for environmental policy. With respect to the specific case of developing countries the authors warn that one should not necessarily be overenthusiastic concerning the use of so-called economic instruments. One problem is that they require a lot of information and enforcement costs to be applied in an effective manner and another problem is that the use of those instruments may entail serious risks of collusion and corruption. In a collusion prone environment (which may often be the case in developing countries) one should hence be very careful with propagating so-called economic instruments that involve a transfer of money