The deployment of ‘new’ environmental policy instruments (NEPIs), namely eco-taxes and other market-based instruments (MBIs), voluntary agreements (VAs) and informational devices such as eco-labels, has grown spectacularly in recent years. In 1987, the Organisation for Economic Cooperation and Development (OECD) [OECD, 1994: 177] reported that most national environmental policies still relied upon a regulatory or ‘command and control’ mode of action, but since then the number of MBIs has grown ‘substantially’ [CEC, 2000: 2]. Some estimates put the growth in use in OECD countries at over 50 per cent between 1989 and 1995 [CEC, 2000: 2]. Daugbjerg and Svendson [2001: 3] have estimated that the number of environmental taxes in OECD countries grew from just 30 in 1987 to over 110 in 1997. Environmental taxes are now a mainstay of the national budgeting process, accounting for around seven per cent of total government revenues in 2002.
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