Table of contents

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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