Political intervention arises when there is a discrepancy between the effective level of environmental quality and the desired level of efficiency. To design, reform and implement investment policies, adaptation and resilience policies, labour and skills development policies,
as well as innovation and research & development policies (R&D) , for green growth market instruments can be used:
Fiscal and pricing instruments valuing natural assets
- reform energy, water, agricultural subsidies
All subsidies – in energy, water and agriculture – that increase the use of fossil fuels, slow down the competitiveness of agriculture with poor use of soil and land, as well as all those that cause distributive water consequences, should be reformed or eliminated
- Taxes on pollution and other fiscal instruments
Environmental taxes on specific pollutants are an example opportunity offered to political intervention to improve environmental quality by reducing the emissions of the economy with a good income potential.
- Payments for Environmental/Ecosystem Services (PES)
This includes taxes and charges on natural resource use or on pollution, on resource rents, and the reform of subsidies harmful to environment.
Regulations, standards and information
- Standards and certification of Sustainable Production
- Sustainable/Green Public Procurement
- Land tenure rules
Are tightly connected with PES. Risks associated with, for example, illegal logging or land appropriation will undermine the ability of a landholder to provide the ecosystem service, rendering the PES ineffective.