This article focuses on the efficient implementation of environmental regulations in developing countries and discusses following five issues, 1) different efficiency by the different pattern of the Command and Control (CAC) and the Market Based Instrument (MBIs), 2) theoretical implementation conditions, 3) the environmental effectiveness, 4) actual implementation conditions of the each instrument, and 5) the ideal way of environmental policy design in developing countries, followed by conclusions.
Firstly, if the CAC based emission standard would be executed by local governments, and if it would not be uniformly applied, the CAC based on the emission standard can achieve efficiency statically and in dynamically. Although the technology standard is theoretically inefficient, it has an advantage of relatively easy execution in developing countries.
Secondly, it is difficult to achieve the environmental target effectively though the Emission Charges. Moreover, the monitoring costs and administrative costs of the Emission Charges might be more than those of the CAC. However, the environmental improvement can proceed efficiently if the Emission Charges would be implemented concurrently with the reinforced CAC.
Thirdly, the Transferable Discharge Permits is a system by which an environmental target can be achieved with statical and dynamical efficiency. However, this efficiency does not always coexist with effectiveness. Moreover, the monitoring costs and the administrative costs to implement this system might be more than those of the CAC.
Lastly, it is important to take into account two aspects of environmental management system such as social capability and the Mixed Regulatory System in the selection of environmental policy in developing countries. Although indirect regulatory methods like Environmental Tax might be suitable in developing countries, the Mixed Regulatory System can be much more useful considering the difficulty of tax rate setting.
View full abstract