Role of Economic Policies in Protecting the Environment: The Experience of Pakistan (Report‪)‬

Economic policies that ensure efficient allocation of resources is a necessary, but not a sufficient condition for creating appropriate environmental incentives. Environment-specific policies are also needed to correct market failures leading to environment problems. Two types of policies can be used to deal with environmental problems--command and control policies and incentive- or market-based policies. Command and control policies involve government mandating of environmental quality standards on emissions, technology type, or input use. Incentive- or market-based policies use prices to try to affect pollution and resource use. Despite the advantages of market-based approaches, Pakistan, like many other countries, mostly followed control policies. But these policies have often failed to achieve results because regulating institutions lack the financial and technical resources to implement these policies effectively. Pakistan's brown environmental problems include industrial waste water pollution, domestic waste water pollution, motor vehicle emissions, urban and industrial air pollution, and marine and coastal zone pollution. Economic policy failures are contributing significantly to many of these problems.