There are many different types of environmental policies.

Each type antici-pates that administrators and

polluters will respond in particular ways. Each type has specific characteristics that make it more likely to
succeed in some circumstances and not in others. When we evaluate the effectiveness and
appropriateness of a policy for addressing a given problem in environmen-tal pollution control, it is
important to have clearly in mind a set of policy evaluation criteria.

1The criteria to be used in later chapters to discuss specific environmental policies are the following:

Efficiency

Cost-effectiveness

Fairness

Enforceability

Flexibility

Incentives for technological innovations

Moral Considerations

A. Efficiency A state of affairs is efficient if it is one that produces for society a maximum of net benefits.
Note that we have said “society.” Efficiency is sometimes miscon-strued to mean the maximum of
somebody’s net income. Although efficiency does not rule that out, it involves substantially more than
this; it involves the maximum of net benefits, considering everybody in the society

B. Cost-Effectiveness It is often the case that environmental damages cannot be measured accu- rately.
This sometimes makes it useful to employ cost-effectiveness as a pri- mary policy criterion. A policy is
cost-effective if it produces the maximum environmental improvement possible for the resources being
expended or, equivalently, it achieves a given amount of environmental improvement at the least
possible cost. For a policy to be efficient it must be cost-effective, but not necessarily vice versa. A policy
might be cost-effective even if it were aimed at the wrong target. Suppose the objective is to clean up
New York harbor, regardless of what the benefits are. We would still be interested in finding poli- cies
that did the job cost-effectively; however, for a policy to be socially effi- cient, it must not only be cost-
effective, but also balance costs with benefits. To be efficient, the harbor-cleaning project must balance
marginal benefits with marginal cleanup costs.