Environmental Policy Coverage

What is Environmental Policy?

Environmental policy refers to any course of actions that is deliberately take (or refrained from) to manage human activities to prevent or mitigate harmful effects on natural resources, the ecosystem or nature.

In general, environmental policy aims to ensure that man-made changes to the environment do not carry harmful effects on human beings or animal species.

Environmental policy is comprised of two dominant terms: the environment and policy. This term, when broken-down can be understood—environment refers to the ecological dimension or ecosystems, but also takes into account the quality of life and the ability to manage our resources.

Policy is defined as a course of action or principle adopted or proposed by a government body, a business, an individual or any entity.
As a result of these separate definitions, environmental policy will focus on problems that arise from the impact of human beings on the environment; this impact, in turn, places a negative externality on society in the form of a damaged quality of life.

What does Environmental Policy Cover?

Those environmental issues addressed by environmental policy will typically include, but are not limited to the following situations, subjects and circumstances: air and water pollution, ecosystem management, waste management, biodiversity protection, and the protection of wildlife, endangered species and natural resources.

What is the reasoning behind Environmental Policy?

The rationale behind environmental policy and more specifically the reason why a governing body is involved in environmental regulation is centered on market failure in the form of externalities, including the tragedy of the commons as well as the free rider problem. An example of these economic situations can be elucidated upon in a factory example.

If a factory pollutes a river, the cost of such actions is paid by society; the local government and individuals within the community must clean the water before they can drink it.

The free rider problem refers to a situation where the private marginal cost of taking action to protect the environment is larger than the private marginal benefit; however, the social marginal cost is less than the social marginal benefit.

Lastly, the tragedy of the commons refers to a problem where no one individual owns the commons; each individual has a distinct incentive to utilize commons resources as much as possible.

As a result, without government intervention, the problem of the commons would be prevalent; examples of this situation include overgrazing and overfishing.

To execute and implement efficient environmental policy, governments will use a number of different instruments, including economic incentives and various market-based instruments such as taxes and tax exemptions, tradable permits and fees to encourage compliance with the established environmental policy.