Policy instruments to promote environmental protection include official restrictions and positive incentives designed to control activities that may be harmful to the environment.
Prevention better than cure
Finnish environmental policy went through radical changes in the 1980s, when there was a shift away from dealing with narrower problem areas towards broader and more integrated assessments of environmental issues. Environmental policies have subsequently included more preventive measures and controls imposed on potentially harmful activities, rather than corrective measures to repair existing damage.
Environmental policy instruments can be classified into legislative controls, economic instruments and informative measures.
Harmful environmental impacts are largely controlled through the compulsory environmental permits that cover all kinds of potentially harmful activities. Other environmental legislation has been enacted to prohibit the use of certain harmful substances, to set limits on emissions, to enforce certain technical standards, to make producers responsible for their products as waste, to limit certain activities in special areas such as nature reserves or car-free areas in cities, and to control land use planning.
Whereas legislative policies mainly consist of enforcements and restrictions, economic instruments are designed to provide more positive financial incentives to promote more favourable forms of production and consumption. Economic instruments include selective taxes and fees, as well as various kinds of subsidies, grants and tax exemptions, for both companies and individual citizens. The key feature of all these measures is that the authorities are involved at one end of the financial transaction. Through another type of economic instrument, the authorities can also set favourable frameworks for financial transactions within the private sector. Such instruments include the deposits paid on returnable drinks containers, and emissions trading schemes.
It is often difficult or even impossible to trace the original causes of environmental problems. It is therefore vital that the authorities also use softer policy instruments to improve our understanding and awareness of these issues. Extensive research and monitoring work must be supported and publicised, and public awareness of environmental issues should be increased through education and special training. Other informative measures such as environmental labelling schemes attempt to control consumption patterns by encouraging consumers to use goods and services that are less harmful to the environment.
In addition to these official measures, companies and other organisations may voluntarily adopt a variety of market-based measures to highlight their own contributions towards improving the environment. Various business sectors have made energy-saving agreements with the ministries and MOTIVA Oy, a special independent organisation set up to promote energy savings. Many companies are also committed to continuous environmental improvements through their active involvement in the EMAS or ISO 14001 environmental management systems.