Market-Based
Solutions

ECONOMIC INSTRUMENTS	LAWS
Advantages They allow each polluter to choose the most effective and efficient way of reducing pollution. They provide an incentive to continue reducing pollution. They minimise the cost of achieving pollution reductions. They provide finance for other things including restoration of damage.	Advantages They determine objectives and means independently of economic factors and market forces. They are the surest means of preventing irreversible effects or a totally unacceptable level of pollution. Their objectives, criteria and surveillance measures are widely understood.
Disadvantages They depend on trial and error to get the charges right. Setting up arrangements for supervising and measuring is expensive.	Disadvantages They may not be the most cost effective way of ensuring standards are met. They do not provide an incentive for polluters to do better than the standard. They are generally difficult to administer and enforcement of standards depends on the resources available to the regulatory authority.

Ref: HRSEC 1987, pp14-15.