This has resulted in the reduction of over 100,000 tonnes of the total 200,000 tonnes of ozone-depleting substances consumed in developing countries. Economic Instruments Market-based economic instruments can also be effective in dealing with global problems such as those of tropospheric ozone, stratospheric ozone, acid rain, and global warming because they involve pollutants that can be treated as uniformly mixed. Environmental taxes and subsidies, effluent charges and tradable emission permits can be more cost-effective than effluent and emission standards or mandated technology in attaining a given level of environmental quality. Economic instruments can offer dynamic efficiency and new incentive structures that can improve resource allocation and promote technological innovation. Industry compliance costs can be lowered as polluters are afforded the choice between paying charges, treating waste, altering input combinations, or relocating.
Some economic instruments can give advantages to domestic producers and thus have trade effects.
Therefore, their use must be considered carefully. Published in the ICME Newsletter, Vol.