Chapter 31. Chapter 31: Environmental Policy

What policy tools can be used to implement and enforce environmental policy?

Why You Should Care

Every government has a multi-headed approach to environmental regulation. This approach must uphold the laws that are already on the books, but each administration has different interpretations of the best way to deal with the environmental issues of their time. The view of the best policy tools reflects both the philosophy of the environmental agencies involved and successes of different policy tools in the past.

In general, policy tools break into “carrot” and “stick” categories. Carrots are rewards for voluntarily changing to “greener” policies: These are typically incentives or subsidies to transition to or adopt a more expensive or less familiar policy. Sticks are penalties for failing to meet minimal standards: Since these are set from above, they are called “command and control” policies because they are designed for everyone, regardless of size or environmental impact.

In general, most laws are enforced by regulations that blend command and control with incentives. For instance, the Clean Air Act sets maximum pollutant release standards with penalties if those standards are exceeded. At the same time, there are grants, subsidies, and tax refunds for adopting renewable energy (such as photovoltaic solar panels) to replace fossil fuels that create the pollutants.