The Government therefore wishes to explore the possible role of economic instruments in achieving higher standards within a more general strategy for further improvements. Both will be based on an assessment of the associated costs and benefits. The Advantages of Economic Instruments 7. The main feature of an economic instrument is to make clear to polluters the wider cost of their polluting activities. In short, they aim to demonstrate the 'price' of environmental damage and make polluters pay accordingly.
Polluters then have a choice between paying that price or taking action to reduce their pollution.
Where this is cheaper, firms can be expected to take such action. The economic instrument should provide an ongoing incentive for the development of new, more cost-effective pollution control techniques. Under the current system, the costs of action to reduce pollution may not be fully taken into account in setting discharge consents. Different polluters may face very different costs for reducing pollution. If those differences in cost can be better reflected, the pattern of discharge control can be changed so that overall costs are reduced.