This table generalizes the different dimensions between traditional regulatory tools and innovative incentive based tools.
| Traditional Regulatory Tools | Innovative Incentive-based Tools | |
|---|---|---|
| Characteristic | Rules-based - imposes uniform, prescriptive and mandatory requirements as minimum standards and requires a high level of government assurance | Performance-based - promotes environmental performance with greater flexibility for parties to meet defined environmental objectives and requires lower level government assurance |
| Types | "Command and control" tools such as product bans, emission limits, technology specifications, design-based standards | Market based instruments and fiscal mechanisms, cooperative management agreements, information disclosure, and voluntary stewardship and corporate environmental responsibility |
| Goal | Compliance with the law | Encourage beyond compliance and continuous improvement in performance |
| Driving Mechanism | Regulatory deterrence | Financial incentives and disincentives, regulatory deterrence and voluntary stewardship |
| Performance Measure | High rates of compliance against minimum standards | Improved environment - cleaner air and water, more productive land and sustainable resources |
| Ethic | Respect for the law to avoid prosecution | Integrate environmental, social and economic perspectives into decision making processes |
| Industry Tools | Pollution control, best practical technology, monitoring, reporting, abatement, remediation | Pollution prevention planning, environmental management systems, best management practices, community liaison, voluntary environmental audits, innovative technologies |
| Credibility and Acceptance | Proven record, general acceptance and understanding by industry, government and other stakeholders | Emerging acceptance, although gaining in popularity as alternatives to traditional forms of governance |
| Key Strength | Provides a high level of assurance that minimum standards will be achieved, across all geographic regions | Potential for greater environmental returns, improved cost effectiveness, and promotion of innovative technology for environmental controls |
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Development of environmental tools