Policy Instruments and Incentives

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From the course by Lund University

Greening the Economy: Lessons from Scandinavia

332 оценки

Lund University

Greening the Economy: Lessons from Scandinavia

332 оценки

How can we live a good life on one planet with over seven billion people? This course will explore greening the economy on four levels – individual, business, city, and nation. We will look at the relationships between these levels and give many practical examples of the complexities and solutions across the levels. Scandinavia, a pioneering place advancing sustainability and combating climate change, is a unique starting point for learning about greening the economy. We will learn from many initiatives attempted in Scandinavia since the 1970s, which are all potentially helpful and useful for other countries and contexts. The International Institute for Industrial Environmental Economics (IIIEE) at Lund University is an international centre of excellence on strategies for sustainable solutions. The IIIEE is ideally suited to understand and explain the interdisciplinary issues in green economies utilising the diverse disciplinary backgrounds of its international staff. The IIIEE has been researching and teaching on sustainability and greener economies since the 1990s and it has extensive international networks connecting with a variety of organizations. 5-8 hours/week 5 weeks duration 40 films 20 teachers

From the lesson

National policies

Finally, in the fifth module, we look at how national governments can establish policies to promote green economy across the different levels (individual, business, city, national) discussed in this course. In this module, we discuss how national level policies affect cities, business, and individuals, as well as the challenges for national level policies to influence other levels, including the international sphere. Finally, we will discuss whether national policies from Scandinavia can work in other contexts

Policy Instruments and Incentives5:24

Green Public Procurement5:28

Policy for Waste and Resources7:20

Policy for Lighting Products6:26

Economic Instruments and Price Signals11:54

An OECD Perspective on Green Economy7:01

Green Policy in Europe11:31

Meet the Instructors

Dr. Kes McCormick
Associate Professor and Assistant Head
International Institute for Industrial Environmental Economics
Dr. Luis Mundaca
Associate Professor
International Institute for Industrial Environmental Economics
Prof. Oksana Mont
Professor
International Institute for Industrial Environmental Economics
Prof. Lena Neij
Professor and Director
International Institute for Industrial Environmental Economics
Dr. Thomas Lindhqvist
Associate Professor
International Institute for Industrial Environmental Economics
Dr. Håkan Rodhe
Associate Professor
International Institute for Industrial Environmental Economics
Dr. Peter Arnfalk
Associate Professor
The International Institute for Industrial Environmental Economics
Dr. Charlotte Leire
Lecturer
International Institute for Industrial Environmental Economics

[MUSIC]

[BLANK AUDIO] Hello.

My name is Thomas Lindhqvist and in this lecture I will talk about the various

types of mechanisms that are available for

governments when designing environmentally related policies.

To impose a policy on the national level is to change or reinforce the behaviors

that decided whether you, as a society, will reach the goals you have set.

As a government you may want to change the behaviors of companies.

For instance, if our role as producers and sellers of products.

Or individuals as citizens and as consumers.

Or for that part any other group or factors in society.

What you need to do is to create the incentives that are strong enough to

influence these factors and that will convince them to do what is required.

Various instruments are shown to have various strengths and

be associated with various challenges.

As said do you may or may not know what the best solution is.

For instance,

you may know that you need to reduce the emissions of heavy metals there.

Should the companies install filters?

Should we change raw materials?

Should all companies take action?

Only ones with the biggest emission.

In such a case, you will as a government want to set your targets, but

allow the companies to choose the best way of reaching these targets.

As a government, you will also face problems with control and

whether companies and citizens do what you ask of them.

How much control do you need to have?

And that is depend on what type of interventions you have done.

These are some of the questions you meet when designing policies

to address particular problems.

In addition, a government will, of course, also be limited by political realities.

Will the Parliament accept the proposal for

new regulations, new environmental taxes you put forward as a government?

Will various lobbying groups block the approaches you prefer,

and force you to select the second best alternative?

While the practical reality of designing policies is most of the time quite complex

and demands a lot of understanding of a particular situation you want to regulate

and influence, the way of creating incentives for

policy intervention can easily be explained and systematized.

The most common approach is to divide your policy increment into three different

groups of instruments.

Regulatory instruments, economic instruments, and informative instruments.

How these instruments work could easily be explained by comparing to how we interact

with each other in everyday life.

For instance, how we raise our children.

Let's say that we want to get help with tidying up the room of the children or

we want them to brush their teeth regularly.

We can then address our children in various ways.

We can, for instance, try to force them to do it.

We could say something like, you must clean your room today, and if you don't do

it, you will not be allowed to go to your friends in the evening.

What we have used is a so-called regulatory administrative instrument.

This instruments tell what you must do or what you are not allowed to do.

They also typically link to sanction that will come in place if someone

does not follow the regulation.

For an industry,

this could be a prohibition to use certain toxic substances or

prescription to reuse emission levels below a specified standard.

But we also use other approaches when raising children.

We sometimes give financial incentives.

We can say, if you brush your teeth every day, you will every Saturday get one Euro.

Or we may say that if you don't clean up your room today,

we will deduct from your weekly allowance.

This exemplifies what we often call economic or market-based instruments.

These instruments do not prescribe what must be done, but

add some financial implication.

You can do it your way, but then you will meet an extra cost.

Finally, you can try to change the behavior by

explaining what the consequences of various actions will be.

We will tell our children, what will happen if you don't brush your teeth?

And we will explain what different parents will have to do everything at home

then they will be too tired to play with the children,

to take them to the football game, and so on.

Now, these are also approaches we use when trying to steer the behavior of companies.

We use regulatory instruments to tell them what we must and must not do.

We use economic instruments to encourage and

discourage them by financial incentives.

And we know that if we provide better information about opportunities and

consequences of various actions, many companies will understand that they will

be better off by changing their technologies, routines, and approaches.

As what is good for the environment, often also makes good business sense.

The art of policy making is to choose the right set of policy instruments for

the specific problems that we want to address.

As we are facing big environmental challenges we'll also need clever and

brave policy makers in the coming years.

What we can hope for is that they will make good use of a lessons learned and

be able to find the political support from the message that we as a society needs

to take.

[MUSIC]

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