Information and Education Instruments
Information and education instruments aim to promote environmental protection by improving people's awareness and understanding of environment issues and building their capacity to respond to environmental threats. They include such things as environmental and sustainability reporting by governments and corporations, and advertising and education campaigns.
Many environmental problems arise at least partly because of imperfect information about environmental risks and a lack of awareness about how to respond.
These types of instruments can help overcome these issues and can be effective where the threats to the environment are known and producers have an economic incentive to improve environmental outcomes. Information instruments can also be an important tool for encouraging greater support for environmental protection in the community, which can reduce the political costs associated with various environment policy instruments.
The main flaw associated with information instruments is that they will rarely get at the root causes of environmental degradation. As a result, on their own, they are generally an ineffective means of achieving environmental objectives. However, information instruments are commonly viewed as an essential part of environmental policy packages. Without information instruments it is very difficult for policy-makers to select appropriate policy instruments and it is unlikely that environmental protection measures will attract the political and community support that is necessary to ensure their success.
The advantages and disadvantages of the four approaches are summarized in the Table 1.
Table 1 Domestic environmental policy instruments - pros and cons
Policy instrument
Definition
Advantages
Disadvantages
Regulatory Instruments that impose legally enforceable restrictions on economic agents to realize environmental protection objectives
Economic Instruments that force economic agents to internalize all or part of the social costs associated with environmentally harmful activities and that rely on market forces to promote efficiency
Voluntary Any mechanism or program that aims to protect the environment where relevant economic agents are able to decide whether or not to participate
Information Instruments that aim to promote and environmental protection by improving education people's awareness and understanding of environment issues and building their capacity to respond to environmental threats
Certainty about environmental outcomes Ability to limit free-riding Clarity of standards - easy to comply with, monitor, and enforce No need to negotiate individual standards, which lowers administration costs By utilizing market forces they are able to achieve the desired outcomes in an efficient manner Promote innovation Provide flexibility as they often enable individuals to determine the best method of achieving the desired outcomes Ability to limit free-riding Noninterventionist, meaning they are likely to have high levels of acceptance by producers Low political costs for regulators High levels of flexibility
Noninterventionist
Low political cost for regulators
Flexibility
Relatively low administration costs
Inefficiencies - regulations impede the operation of market forces and can lead to the misallocation of resources Can stifle innovation Potentially inequitable because some may shoulder a disproportionate burden Can lack certainty about environment outcomes Can be complex and have high administration costs Potentially inequitable
Lack certainty about environment outcomes Can have high administration costs Risk of free-riding Risk that producers will engage in gaming to extract excessive economic rents from regulators Lack certainty about environment outcomes Risk of free-riding Inability to address main reasons for market failure
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