The scope for economic instruments of environmental policy in the EC

Abstract

This article discusses the role of economic instruments in environmental policy at the EC level. After an overview of important elements of EC environmental policy, recent developments, with the emphasis on the establishment of the Internal Market, are discussed. The application of economic instruments in the wider context of the OECD, as well as recent activities at the EC level are described. The fiscal harmonization process regarding mineral oil products shows some of the problems that may emerge in the introduction of economic incentives. The article continues with a discussion of the scope of economic instruments at the EC level, based on the main principles of EC environmental policy, and concludes that such instruments have a role to play. This can be made more clear if economic instruments are separated from the fiscal harmonization process and if these instruments are studied in a case-by-case setting.