Chapter VIII.5: Monitoring, enforcement, and the choice of environmental policy instruments

Abstract

Monitoring and enforcement are often overlooked when researchers and policymakers consider the choice of policy instruments. This chapter reviews arguments for how, when, and why monitoring and enforcement may impact the choice of instruments in environmental policy. The chapter considers a wide range of perspectives, including positive descriptive arguments based on political economy considerations, normative arguments based on social welfare maximisation, and normative arguments based on narrower objectives like regulatory cost minimisation. The chapter first considers the choice of policy instruments across regulatory domains – for example, whether a market-based instrument is preferable to a command-and-control instrument. The chapter then considers the choice of policy instruments within each regulatory domain – for example, if a command-and-control standard is to be adopted, how do monitoring and enforcement affect the decision about whether to impose a technology mandate versus an emissions performance standard?