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Economic Incentives: Developing and Implementing Economic Incentives
Table of Contents
Background and Overview
Reasons for Economic Incentives
Developing and Implementing Economic Incentives
Types of Economic Incentives
(NEW!) Focus on Renewable Energy Incentives
P2 Opportunities
Where To Go for P2 Help
Complete List of Links

Essential Links:

Civic Environmentalism in Action
This report is designed to help policymakers at all levels of government create innovative, place-ba...

Economic Incentives in Air Quality
Provides guidance, policies and rules for states to implement economic incentives in improving air q...

Environmental Improvement through Business Incentives (pdf)
Rich and insightful report that gives policymakers ideas on the type of incentive mechanisms that ca...

Environmental Policies for the New Millenium (pdf)
A conference paper discussing general principles in how to implement economic incentives.

EPA's Clean Air Market Programs
How to develop market-based mechanisms for reducing air pollution.

EPA's Pay-as-You-Throw
Guide on how to implement a pay-as-you-throw program in your community.

Pollutant Trading Guidance
A set of resources for developing a water pollutant trading system.

Tools of the Trade: A Guide to Designing and Operating a Cap and Trade Program for Pollution Control...
A reference for policymakers and regulators considering cap and trade as a policy tool to control po...

Water Quality Trading Assessment Handbook
Helps you decide whether a water trading permit is right for your watershed. Includes a structured, ...

The following are general principles to consider when developing and implementing economic incentive programs. They are taken directly from guidelines developed at a conference held cooperatively by the World Resources Institute and the US Environmental Protection Agency, where over 100 various stakeholders from government, non-governmental organizations and the business community attended. The direct link to this report can be found at: For guidance on how to implement these steps and specific incentive-based programs, refer to the Complete List of Links.

  • Properly identify and engage the community of interest
  • Establish clear goals, indicators, and end points
  • Target incentives and language to stakeholder needs
  • Establish strong, consistent leadership and a clear statement of principles around which stakeholder efforts can coalesce
  • Experiment with demonstration projects
  • Acknowledge and plan for culture shock
  • Create equal-opportunity incentive programs
  • Design programs to appropriate scales
  • Build flexibility, practicality, and adaptability into programs
  • Learn from previous successes
  • Establish credibility and comparability of information
  • Where appropriate, help industry associations to understand incentive-based approaches
  • Work with appropriate level decision-makers within companies and develop succession plans
  • Establish clear guidelines on how far states can go with efforts to innovate
  • Develop metrics to help industry and consumers assess costs and benefits of production or behavioral changes
  • Recognize and address industry fears about incentive-based programs
  • Recognize and address environmental advocacy organizations' fears about the use of the market in environmental management
  • Establish externally imposed deadlines for change
  • Consider using combinations of trading and tax incentives
  • Consider moving beyond industry reporting toward self-auditing, with required disclosure


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Hub Last Updated: 10/17/2014