On the Political Economy of Environmental Policy

In the past there was hardly any use of economic instrumentsin environmental policy, mainly command and control measureswere used. More recently, ecological taxes as well as tradablepermits became more popular and voluntary agreements have beenimplemented. Using the Public Choice approach we ask for thereasons of this wider acceptance of economic instruments. Weconclude that the use of market based instruments inenvironmental policy has not increased very much and theirimpact on the actual situation is still rather low, but thereis hope of a at least some increase in the future.