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Media Release
Senator the Hon Robert Hill
Leader of the Government in the Senate
Minister for the Environment

Economic Incentives Good for the Environment

8 July 1997

Economic instruments can be more effective in achieving environmental objectives than regulatory means according to a report released today by Federal Environment Minister Robert Hill.

Environmental Incentives-Australian Experience with Economic Instruments for Environmental Management, produced by Environment Australia, explains how economic instruments perform compared to regulatory means and what the potential advantages are.

The report's findings will be discussed at an Environmental Economics Round Table Senator Hill is convening in Canberra on Thursday (10 July).

The report covers the application of market-based instruments at the three tiers of government. Case studies are presented for Commonwealth, State and Local Government issues where incentives have been applied. Some examples are:

"There has been a growing use of economic instruments applied to the management of natural resources in areas such as forests, fisheries, water quality, and land and biodiversity conservation," Senator Hill said.

"Economic instruments are likely to be a more cost-effective means of achieving environmental objectives than so-called traditional 'command and control' regulatory approaches.

"The main advantages relate to economic efficiency because the instruments achieve environmental objectives at less cost to the community.

"The use of economic instruments for environmental management may be one way of encouraging good environmental practice while improving economic performance and Australia's international competitiveness.

"Recent reports by the Productivity Commission and the Commission of Audit have called for greater use of economic instruments for environmental objectives and this report will provide guidance to further opportunities in this area."

Environment Australia commissioned Dr David James to undertake the review, which substantially updates an earlier report by Dr James on market-based instruments for the environment.

More than 40 experts have been invited to the Environmental Economics Round Table to explore ways of achieving environmental objectives through the use of economic instruments or market-based mechanisms.

The outcomes will help policy makers expand the use of economic instruments.

The report can be obtained from the Department of the Environment, Sport and Territories Community Information Unit toll-free on 1800 803 772.

Contact: Julie Marks, Senator Hill's office, 06 277 7640
Tony Flemming, Department, 06 274 1052

Commonwealth of Australia