On the Political Economy of Environmental Policy

In the past there was hardly any use of economic instruments in environmental policy, mainly command and control measures were used. More recently, ecological taxes as well as tradable permits became more popular and voluntary agreements have been imple-mented. Using the Public Choice ap-proach we ask for the reasons of this wider acceptance of economic instru-ments. We conclude that the use of market based instru-ments in environmental policy has not in-creased very much and their impact on the actual situation is still rather low, but there is hope of at least some increase in the future.