Instrument Mixes for Environmental Policy

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What are the impacts on environmental effectiveness and economic efficiency of using an “instrument mix”, rather than a single instrument, to address a given environmental problem? What are the main arguments for using such instrument mixes, and are the instrument mixes currently in use actually well designed in response to these arguments? These are the main questions addressed in this report, which is based on a series of in-depth case studies. The case studies analyse instrument mixes applied in OECD countries to address household waste, non-point sources of water pollution in agriculture, residential energy efficiency, regional air pollution and emissions to air of mercury.

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Conclusions and Policy Recommendations

This chapter offers recommendations on how environmental instrument mixes should be assessed, and on how their design could be improved to enhance environmental effectiveness and economic efficiency. The chapter highlights the importance of cost-benefit analysis, instrument flexibility and the use of mutually enhancing instruments, but warns against instrument overlap. The chapter also advises that environmental policy instruments should not be over-burdened with non-environmental tasks.

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