Economic instruments for environmental policy making in Ontario

The conditions and approaches required for a successful implementation of economic instruments in Ontario are reviewed. The advantages and disadvantages of economic instruments are discussed, as are some design issues. Some best practices and practical experiences from Canada, the United States, and Europe are examined through the use of nine specific case studies. Each one highlights a different environmental challenge, such as energy efficiency, air pollution, water pollution, waste management along with the solutions that were implemented. The situations described were not all successful, but there is much to be learned from unsuccessful episodes. Lessons learned from the review of the case studies were presented. The points to ponder when using economic instruments in Ontario were highlighted. The command and control policy instrument must be kept in context when considering economic instruments. The reasons that underline the preference of the economic theory for economic instruments are discussed. The different types of economic instruments are described, and the considerations related to the design and comparison of economic instruments is briefly discussed. The authors concluded with several points to ponder: there are a number of options available, details must not be neglected, consultation with the interested parties is important, there is a need for frequent reassessment, and using a number of instruments is helpful. 55 refs., tabs., figs