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D. Methods of assessing the effectiveness of policies/measures
Determining the impacts of economic policy measures on the preservation, degradation of the environment (qualitative, quantitative and checklist approaches)
The environmental impact of a policy or project may be defined as changes in the quality and/or supply of an environmental good or service that result from the policy/project. Impacts can be classified into the following:
The different types of impacts
|Types of impacts
|Positive or negative impacts
- normally referred to as benefits
- have the effect of increasing net the economic benefits or reducing the costs of the project
- referred to as damages
- have the effect of increasing the costs of the project or reducing the net economic benefits
|On-site and off-site impacts
- occurs on the site where the project is operated
- i.e. noise pollution
- occurs off the project site
- i.e. downstream river pollution
|Physical, social, economic and psychological impacts
Social and economic impacts
- i.e. loss of biodiversty, exposure to carcinogenic substances
- i.e. lost income, employment generation, displacement of people, destruction of cultural artifacts and buildings
- i.e. increased stress as a result of project activity
|Near-term and long-term impacts
- impacts that can occur at the onset of or soon after the project commences
- impacts that extend several years after the project
- some impacts may be irreversible
|Internal and external impacts
- impacts that are reflected in the prices or costs of goods and services
- only affect the consumers or producers of those goods/services
- impacts not reflected in prices or which affect those not compensated or directly involved in the good's production/consumption
Assessing environmental impacts
Environmental impacts can be assessed using
|Types of approaches
- an identification and description of the important impacts that cannot be exporessed in physical units or monetary terms
- used especially in cases where data do not exist
- i.e. impacts on species of which little is known, impacts in regions with no baseline data
- involves expressing the potential magnitude of each impact in appropriate physical units
- i.e. reduced number of cases of a disease associated with waste water treatment, the number of residents displaced by a power project, or the amount of hectares of a forest conserved due to improved resource management
- these effects should be converted into monetary terms to be used in the cost-benefit analysis
- involves a subjective assessment of the environmental impacts and classifying them into various categories reflecting the severity of the impacts
- is useful for impacts which cannot be easily quantified using physical units
- i.e. biodiversity impacts of a project or policy could be classified into the following: very low, low, medium, high, or very high
When assessing environmental impacts of policy/measures, the various policy assessment activities should be considered.
Policy assessment activities
Assessment activity should focus on the relationship between existing policies and interventions
and behaviours (compliance, behavioural change) or on background
data related to identification and refinement of new initiatives
|Types of government strategies
|(a) Regulatory frameworks:
||Assessment activity related to regulation should focus on:
- Assessment of economic efficiency and costs of regulations
- Assessment of extent of compliance with regulations in priority environmental sectors
- Monitoring and assessing changes in behaviour with introduction of new regulations
||Assessment activity related to standard should focus on:
- Measuring compliance
- Measuring the reasons for compliance/non-compliance
|(c) Tax and subsidy structure:
||Assessment activity in this area should focus on determining the distorting effects of the tax and subsidy structure on the environment, taking account of the two important uses of the tax mechanism:
- To what extent does the tax in question internalize environmental externalities into the pricing structure?
- To what extent does the tax act as a funding mechanism for environmental rehabilitation?
|(d) Market-based incentives:
||Focus of the assessment activities of various Polluter Pays Principle economic tools
- Licenses, concessions and quotas
- To what extent does the scheme in question internalize environmental externalities into the pricing structure?
- To what extent does it improve the efficiency of production
to result in conservation of resources?
- Emissions charges
- To what extent emission charges encourage compliance or potential compliance?
- Can the emission fees change behaviour of the firms to reduce their emissions?
- User fees
- Comparative experience throughout the nation to facilitate more realistic implementation
- determining the effectiveness of user fee systems
- Refund mechanisam
- ensuring that the activity is economic
- the impact and the relationship between refund amount and impact
- Product levies
- The impact of product levies and the relationship between taxes levied and consumption.
- Environmental quality promotion
- the effectiveness of promotion and awareness activities
- The informal sector
- ensuring measures targeted to the informal sector are not causing undue hardship
- Industrial promotion
- What types of industries are being attracted in terms of their environmental impacts?
- How is environmental equipment (supportive of cleaner industrial processes; or "end of pipe" technologies) treated under the policy currently in force? and
- How do locational incentives associated with the program affect the environment? For example, are new industrial zones being created where carrying capacity or environmental infrastructure is not consistent with the scale of industry being attracted. Are locational incentives spreading industry to such an extent that energy consumption is being inordinately increased?