Everything about Environmental Policy totally explained
Environmental policy is any (course of) action deliberately taken (or not taken) to manage human activities with a view to prevent, reduce or mitigate harmful effects on nature and natural resources, and ensuring that man-made changes to the environment don't have harmful effects on humans.
Definition
It is useful to consider that environmental policy comprises two major terms:
environment and
policy. Environment refers to a broad concept consisting of three main dimensions: for example an ecological (ecosystems) dimension, a social (quality of life) dimension and an economic (resource management) dimension. Policy can be defined as a "course of action or principle adopted or proposed by a government, party, business or individual" . Thus, environmental policy focuses on problems arising from human impact on the environment, which retroacts onto human society by having a (negative) impact on human values such as good health or the 'clean and green' environment.
Environmental issues generally addressed by environmental policy include (but are not limited to)
air and
water pollution,
waste management,
ecosystem management,
biodiversity protection, and the protection of
natural resources,
wildlife and
endangered species.
Rationale
The rationale for governmental involvement in the environment is
market failure. There are three types of market failure that justify government action:
negative externalities, the
free rider problem, and the
tragedy of the commons. An example of a negative externality is a factory that
pollutes the water of a river. The negative cost of such action is paid by society-at-large when they must clean the water before drinking it and is "external" to the costs of the factory.
Air pollution is another common example of a negative externality. The free rider problem is when the individual cost of taking an action to protect the environment is greater than the individual benefit. For example, installing an anti-pollution device on a car may cost several hundred dollars and only reduce the air pollution by a little. The rational individual decision is to not buy the device and benefit from the actions of others. Such individual rationality however, can lead to collective irrationality. Finally, the tragedy of the commons is the problem that, because no one person owns the commons, each individual has an incentive to try to exploit common resources as much as possible. Without governmental involvement, the commons may become overused, producing a worse result for everyone. Examples of tragedies of the common are
overfishing and
overgrazing.
Environmental policy instruments
Environmental policy instruments are tools used by governments to implement their environmental policies. Governments may use a number of different types of instruments. For example, economic incentives and
market-based instruments such as taxes and tax exemptions, tradable permits, and fees can be very effective to encourage compliance with environmental policy.
Voluntary measures, such as bilateral agreements negotiated between the government and private firms and commitments made by firms independent of government pressure, are other instruments used in environmental policy. Another instrument is the implementation of greener public purchasing programmes.
Often, several instruments are combined in an instrument mix formulated to address a certain environmental problem. Since environmental issues often have many different aspects, several policy instruments may be needed to adequately address each one. Furthermore, instrument mixes may allow firms greater flexibility in finding ways to comply with government policy while reducing the uncertainty in the cost of doing so. However, instrument mixes must be carefully formulated so that the individual measures within them don't undermine each other or create a rigid and cost-ineffective compliance framework. Also, overlapping instruments lead to unnecessary administrative costs, making implementation of environmental policies more costly than necessary In order to help governments realize their environmental policy goals, the
OECD Environment Directorate studies and collects data on the efficiency of the environmental instruments governments use to achieve their goals as well as their consequences for other policies.
Further Information
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