Experience in Developed Countries

In this chapter, we address many topics chosen to illustrate various aspects of instrument design for the industrial sector ¹ :

efficiency in the abatement of sulfur emissions,

abatement of nitrogen emissions,

green tax reform in Germany,

prohibition, taxation, and regulation of hazardous solvents,

global ozone policy, and

global climate policy.

First, we discuss the energy sector, in which many countries combine regulation with market-based policies to promote energy efficiency, affect the structure of energy supply, or specifically limit emissions (e.g., of sulfur oxides or nitrogen oxides). This discussion provides an opportunity to compare policies proposed for similar goals in different settings. One of the most important issues related to the energy sector is acid rain, and we compare the tax approach commonly used in northern Europe with the permits approach of the United States.