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The United States Experience with Economic Incentives for Pollution Control

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Over the the last 20 years, and particularly during the past decade, economic incentives have been increasingly used to control pollution and improve environmental and health protection. The report assesses the role of economic incentives for controlling environmental pollution and documents hundreds of uses of economic incentives for controlling pollution at all levels of government to both supplement and substitute for traditional regulatory approaches.

The report finds two general trends concerning the use of incentives:
  1. Increasing diversity of economic incentives used by EPA--Although historically EPA has relied on regulations to reduce pollution and improve the environment, it has begun to use a wide variety of economic incentive mechanisms in recent years.
  2. Increasing application at other levels of government–Dozens of such applications are discussed in the report but there are hundreds more. Both the number of applications and their diversity is growing rapidly at the state and local level. Incentives are particularly useful in controlling pollution that has not already been subjected to traditional forms of regulation.

The Report also concludes that economic incentives for environmental pollution control:
Economic incentives are expected to be particularly useful in controlling pollution not subject to regulation For instance, citizens can be encouraged to reduce curbside solid waste by recycling, composting and other means if there is a disposal charge based on the volume of solid waste.

Examples of economic incentives discussed in the report include:
This report is an update and extension of the United States portions of a previous 1992 EPA report and a previous 1997 report to EPA including many additional economic incentive instruments. These previous reports included a section on foreign experiences with incentives which is not included in this 2001 report, but in November, 2004 a report on International Experiences with Economic Incentives for Protecting the Environment was published by EPA. You can also download this 2001 report from the report record in Adobe Acrobat format rather than read it here online if you wish.

For a limited time you can obtain a printed copy of this 2001 report by sending an Email to carlin.alan@epa.gov or by writing Alan Carlin at USEPA (Mailcode 1809), Washington, DC 20460.

Use the "Quick Links" in the upper right to browse this report; the links denote how records will be sorted, though the individual records are consistently displayed regardless of sorting. Additionally, a search box appears at the top of each sorting page. There are also a number of other browsable reports available on this Website.



National Center for Environmental Economics
Office of Policy, Economics, and Innovation
Office of the Administrator
U.S. Environmental Protection Agency
Washington, D.C. 20460

January, 2001

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