Factors for Evaluating a Policy Instrument

a) Effectiveness: A policy instrument should be judged on the basis of its effectiveness in controlling pollution. If the particular policy instrument does not give intended results it should be avoided.

b) Socio-economic efficiency: The environmental objective should be realized at the minimum cost so that society's resources are utilized in an optimal way, i.e., without any wastage or additional costs. For a policy should be considered 'efficient', the total costs (including costs to the government, individuals and firms) involved in implementing the policy must not outweigh the total benefits.

c) Dynamic efficiency: The policy instrument should provide incentives for environmental improvement over time and space. A policy instrument may also be judged by the extent to which it can be adapted to changing market, technology, knowledge, social, political and environmental conditions.

d) Equity: The costs and benefits of the policy instrument should be distributed equitably among sections of society; particularly the interest of the poor and vulnerable sections should be protected. Moreover, the richer section should not be in a position to influence policy-making to safeguard their interest.

e) Operational feasibility: Given the level of socio-economic development of the economy, it should be feasible to implement the policy instrument. The political and bureaucratic machineries also should back its implementation.

f) Community acceptance: The success of a policy instrument critically depends on the degree to which the community accepts it. In order to make the community understand the objectives and benefits of the policy instrument there should be public consultations and education programmes.