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You are here: Home / Environmental topics / Policy instruments / Policy instruments

Policy instruments

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Policies have a key role in determining the state of our environment. The EU has 35 years' experience of environmental policy-making, during which time well over 200 legal acts have been put in place and strategic paths have been defined. Initially, policy focused on regulating technical standards. Gradually, the spectrum of policy instruments has broadened, recognising that there is no single universal policy tool that can provide solutions to all problems.

The EU 6th environmental action programme promotes a blend of instruments: legal requirements ('command and control' measures), technology transfer, market-based instruments, research, environmental liability provisions, green public procurement and voluntary schemes and agreements. The EEA's policy effectiveness studies show that the institutional setup can be as important as the design of the policy itself.

The EU environmental legislation package is recognised as one of the strongest in the world. It works — when it is fully implemented and enforced. Without it, our environment would look quite different. We have cleaned up our water and our air, phased out some ozone-depleting substances and have doubled rates of waste recycling. Our cars pollute less; without the improvements made by catalytic converters over the past 20 years, some emissions would be ten times the level they are now.

Today, the EU Sustainable Development Strategy provides the overarching long-term framework, aiming at synergies between economic, social and environmental goals. The EU Treaty requires environmental protection to be integrated into the definition and implementation of all Community policies, such as energy, agriculture and transport. This 'environmental integration' helps prevent problems at their source instead of using 'end-of-pipe' solutions only.

The EU is working on a more integrated approach to policy making, guided by the principles of impact assessment and better regulation. This also includes recommendations for improving public participation in managing the interactions between science, technologies and society — prerequisites for the application of the precautionary principle.

Market-based instruments such as tradable permits of pollutants and environmental taxes are rising up the EU agenda. They aim to bring the environmental and health costs of economic activities into market prices and to put a price on the use of natural resources like air, water and soil. Recent examples are the EU emission trading scheme and harmonised environmental taxation such as the Taxation of Energy Products Directive and the 'Eurovignette' Directive for freight transport. The elimination of environmentally-damaging subsidies is also a priority. The 2007 Green Paper on Market-based instruments for environment and related policy purposes reinvigorates the idea of environmental tax reform, i.e. shifting from labour taxation to environmental taxation.

'Socialism failed in saying the economic truth. Capitalism may fail in saying the ecological truth' (Lester Brown, Fortune Brainstorm Conference, 2006).

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European Environment Agency (EEA)
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Phone: +45 3336 7100