The USSR's Experience with Economic Incentive Approaches to Pollution Control

While the United States is perceived to be the world leader in applying economic instruments to reach pollution reduction targets, many other OECD and East European countries are also applying these tools. And though much has been written about the US experience—offsets, bubbles, netting, emissions banking, and SO allowance trading—little is known about the use of pollution charges within the former Soviet Union. This paper summarizes the early experience with pollution charges in the Soviet Union. It is worth noting that though circumstances in Russia are fast changing. As of June 1992, the pilot projects described in this paper now appear to be the foundation for a widely developed pollution charge program.