Financial methods in environmental decisions
Financial methods in environmental decisions

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Financial methods in environmental decisions

Command and control

Command and control uses laws and regulations to prohibit or restrict undesirable practices. For example, under the terms of the USA’s Clean Air Acts, the operators of specified industrial processes are obliged to apply the principal of maximum achievable control technology (MACT) to control pollution. A series of standards document what MACT represents for each industry and, in effect, set the emission limits.

Other command-and-control measures include the EU’s incineration directive, phasing out of CFCs (chlorofluorocarbons) in many countries through bans on their use, the banning of leaded petrol and the requirement for cars to be fitted with catalytic converters in many developed countries.

The principal advantage of a regulatory approach is that, provided that it is properly implemented, the reduction in pollution in a given country or area can be predicted accurately. Also, properly policed regulations cannot be avoided; there is no scope for an organisation or individual to take the attitude ‘I can afford to so I’ll continue to pollute’.


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