| Abstract: | Economic development in developing countries must be accomplished in a manner that does not harm the environment with pollution. Pollution harms human health and productivity. Thus appropriate strategies must be developed that promote growth, reduce poverty, and protect the environment. A review of the current literature is performed with attention paid to cost-effective interventions i.e., comparisons of regulatory and fiscal instruments that can reduce pollution. Both direct instruments (like effluent charges, tradable permits, deposit refund systems, emission regulations and regulatory agency funding for purification, cleanup, waste disposal, and enforcement) and indirect instruments (like input/output taxes and subsidies, substitution subsidies, abatement inputs, regulation of equipment and processes, and development of clean technologies) are examined. Examples are used to show how indirect instruments can be successful when monitoring and enforcement is too costly. A careful examination of distributive concerns illustrate how the effect on the poor may need particular consideration and how groups with vested interests can help evaluate the probable success of such interventions. |
