Community Research and Development Information Service - CORDIS


Using the market for cost-effective environmental policy - market-based instruments in Europe

Funded under: FP6-SUSTDEV


Much environmental pollution and natural resource depletion comes from incorrect pricing of the goods and services we produce and consume. 'Market-based instruments' (MBIs) - such as taxes, charges, subsidies and tradable permits help to realise simultaneously environmental, economic and social policy objectives by taking account of the hidden costs of production and consumption to people's health and the environment, in a cost-effective way. These hidden costs include damage from air and water pollution, waste disposal, soils and species losses, climate change and the floods, heat waves and storms that it brings, and health costs. These costs are often paid by people who are not even benefiting from the use of these products, such as the next generation of children, the Arctic peoples who are on the receiving end of Europe's pollution, the poor living next to roads and factories, or pensioners without cars in big cities.
Market-based instruments can be particularly effective tools for dealing with the four major areas of action of the EU 6th environmental action programme, namely: tackling climate change, preserving nature and biodiversity, protecting environment and human health, and through the sustainable use of resources and management of wastes.

Additional information

Authors: No author stated, European Environment Agency, Copenhagen (DK)
Bibliographic Reference: Luxembourg: Office for Official Publications of the European Communities, 2006, 48p, free of charge
Availability: Katalogue Number: TH-AL-06-001-EN-C The paper version can be ordered online and the PDF version downloaded at:
ISBN: ISBN 92-9167-810-4
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