ABSTRACT
This chapter analyses first economic instruments and then environmental agreements, both in a general sense and in terms of how they are being utilised by various Member States. Economic instruments have come into favour because they permit companies to make the choice between paying for cost of the pollution or paying for the pollution control equipment; thus, if the cost of polluting becomes too high, the firm will cease its activity. The rationale of the eco-tax system is to affect the habits of consumers so as to reflect a greater respect for the environment. Environmental agreements may be described as instruments, typically contracts which are created via consensus between government and industry. The frustrations of Member States regarding the enforcement of command-and-control legislation has led them to seek alternative methods of implementing all types of environmental legislation.
