BALTIC SEAENVIRONMENT PROCEEDINGS No. 59 - Helcom

ECONOMIC INSTRUMENTS IN ENVIRONMENTAL PROTECTION
Isabel Pipping, M.Sc. (Techn.)
Emelie Enckell, M.Sc. (Techn.)
National Board of Waters and the Environment
Despite the substantial progress made in environmental
protection in Finland and other Western countries, the
pollution load to the environment is still too great.
Consumption is increasing and in many places, including
ANNEX 1
Finland, production capacity has grown considerably. The
rapid increase in fish farming has caused the eutrophication
of waters that were previously in their natural state. The
adverse effects of agriculture, forestry and peat production
have also increased in many regions.
The policy instruments used so far to solve environmental
protection problems have been largely judicial and
administrative. In Finland, environmental protection policy
is based partly on various permit, planning and reporting
systems and partly on prohibitions and general regulations.
Economic instruments have been used very little. Since
certain problems can no longer be managed sensibly and
effectively by administrative policy alone, it is necessary to
examine the ways in which economic instruments could
complement and possibly also partly replace administrative
policy. The new approach is justified by both the seriousness
of the environmental problems and by the increasing cost of
pollution abatement. European integration, the
internationalization of production, and the need for changes
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