LESSONS FROM THE USE OF ECONOMIC INSTRUMENTS

Belgium: In 1993, Belgium introduced a wideranging ecotax system. An evaluation has shown that the initiative has had some very rapid effects:

• - The production processes of throw-away razors and cameras were changed before the tax was even implemented so that only recycable products are produced.
• - A deposit refund system for industrial packaging has been introduced as a result of the eco-tax decision. Without the refund system the industries would have had to pay the ecotax.
• - The tax on paper pulp is lowered by half if chlorine is not used in the bleaching process. As a result, industry now produces chlorine-free paper.

Sweden: The late 1980s and early 1990s saw a breakthrough in the introduction of economic instruments. For example, the differentiation between leaded and unleaded petrol was almost doubled in 1993. As a result, the sales of leaded petrol decreased from about 40% down to almost zero.

A similar scheme of environmental classification of diesel fuels into three classes for taxation was introduced in 1991 and revised in 1992. The sales of the two environmentally better qualities has increased from less than 1 % in 1990 to about 75%. The Government has stated its intention to further increase the tax on certain diesel fuels.