While economists have set out the desirable features of market based instruments for environmental policy, those theoretical perceptions are rarely met in practice. Since governments cannot design and implement policy measures without taking account of political realities, there will usually be a disparity between theory and practice. First, while economists may concentrate on “optimal” instrument design serving one overriding goal – economic efficiency –, political reality may demand that other goals, which are not necessarily consistent with each other, also play a part in practical design and implementation.