Criteria for evaluating the policies or measures

The success or suitability of the environment-related policies or measures may be judged according to the following broad criteria:

Figure 1: Criteria for evaluating the policies or measures in the policy formulation and implementation process

'Effectiveness' refers to the degree to which the policy or measure achieves the environmental objective of protecting the environment or natural resource. For example, with regard to a pollution abatement policy, the issue is whether the policy actually results in a reduction of pollution.

Efficiency or 'allocative efficiency' refers to the use of society's resources in an optimal way, i.e. without any wastage or additional costs. For a policy to be considered 'efficient', the total costs (including costs to the government, individuals and firms) involved in implementing the policy must not outweigh the total benefits. Thus, improved efficiency is associated with cost savings to firms or net benefits in terms of improvement in environmental quality and natural resource stocks. For natural resources, examples include increases in sustained yields in fisheries and forestry.

The suitability of policy measures may also be judged by the extent to which they can be adapted to changing market, technology, knowledge, social, political and environmental conditions. For example, the degree of flexibility of an emissions charge can be determined by the extent to which the lead agency can react quickly to changes in emissions and whether it has the legal authority to make such changes. In cases, where there are several layers of bureaucracy, the change might be too late to be effective.

An important consideration in assessing policy instruments is the issue of equity or 'fairness'. This has to do with the distribution of the costs and benefits among different groups in the population. Impacts on low-income groups may be a concern, as well as effects on the profitability and competitiveness of local industry.

To be effective, policy instruments or measures must be able to fit in with existing or proposed legislation. There must also be the necessary administrative support to make the policies/ measures work. As indicated in the other modules, sometimes the effectiveness of policies is hampered by jurisdictional constraints in the design and implementation of policy measures. For certain types of policies, difficulties may arise with respect to the coordination, monitoring and evaluation functions.

The success of a policy/measure critically depends on the degree to which the community accepts it. Often, this depends on the extent to which the community understands how the policy works and the objective(s) that the policy is trying to achieve. Community support can be garnered through public consultation and education programs. Similar programs may also be targeted to industry groups. The public and industry should also be sufficiently warned about changes in economic instruments such as charge rates, allowable quotas (e.g. for fish and forest harvests) and so on.

Some of the necessary conditions for the use of MBIs in developing countries may be listed as follows:

Existence of an adequate knowledge base, including knowledge of the costs and benefits of different policy instruments and the institutional and technological constraints.
Existence of a strong legal structure: this includes a clear definition of property rights and resource tenure regimes and the ability to transfer these rights.
Competitive markets: this is important for policies such as marketable permits. Unless competitive markets exist, attempts to create markets will not be effective.
Administrative capacity: an adequate administrative capacity must exist to design, administer, monitor and enforce the policies.

C. Criteria for evaluating the policies or measures