Policy can be defined as a “course of action or principle adopted or proposed by a government, party, business or individual”. Relatively recently, environmental policy has also attended to the communication of environmental issues. The cost of such action is paid what is environmental policy pdf society-at-large, when they must clean the water before drinking it and is external to the costs of the factory. The free rider problem is when the private marginal cost of taking action to protect the environment is greater than the private marginal benefit, but the social marginal cost is less than the social marginal benefit.
The tragedy of the commons is the problem that, because no one person owns the commons, each individual has an incentive to utilize common resources as much as possible. Without governmental involvement, the commons is overused. Environmental policy instruments are tools used by governments to implement their environmental policies. Governments may use a number of different types of instruments.
Corporate companies who engage in efficient environmental management and are transparent about their environmental data and reporting benefit from improved business performance. Bilateral agreements between the government and private firms and commitments made by firms independent of government requirement are examples of voluntary environmental measures. Another instrument is the implementation of greener public purchasing programs. Several instruments are sometimes combined in a policy mix to address a certain environmental problem. Since environmental issues have many aspects, several policy instruments may be needed to adequately address each one. Furthermore, a combination of different policies may give firms greater flexibility in policy compliance and reduce uncertainty as to the cost of such compliance. Government policies must be carefully formulated so that the individual measures do not undermine one another, or create a rigid and cost-ineffective framework.