The Role of Economic Instruments in Eco-Crime Prevention

Abstract

The chapter deals with economic policy instruments for environmental policy with an emphasis on the instruments' potential to prevent eco-criminal activities. Certain types of economic instruments, frequently used in environmental policy, can serve as prevention tools in a struggle against organized eco-crime. The purpose of the chapter is to put forward a proposal for an adequate instrument design, and is aimed to help policy-makers to set up not only efficient public policy tools, but to create an economic support for the functioning of the legal system. The chapter is based upon the rational polluter model (Spence 2001; Emery and Watson 2004). The Emery Watson model is elaborated and extended in a dynamic context, introducing discount rates and present value calculations. It is used to analyze the economic impacts of environmental policy instruments on polluters' behaviour. Finally, a set of policy recommendations obtained from the extended model is confronted with the lessons learned from the Republic of Serbia environmental policy.