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Greening the Budget

Budgetary Policies for Environmental Improvement

Edited by J. Peter Clinch, Kai Schlegelmilch, Rolf-Ulrich Sprenger and Ursula Triebswetter

Greening the Budget regards the fundamental cause of environmental degradation as government and market failure and proposes the use of budgets as an instrument of environmental policy to rectify this problem. The book focuses on the elements of the public budget which currently affect the environment and explores the scope for greening both revenue and expenditure through specific measures.
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Chapter 13: Economic instruments for agri-environmental policy: what, when, and what for?

Budgetary Policies for Environmental Improvement

Dominic Hogg


Dominic Hogg INTRODUCTION This chapter is intended to provoke thinking about the tools that might be employed for meeting the objectives of agri-environmental policy in the EU. In particular, what role might be played by economic instruments in this area? The term agri-environmental policy suggests that a special environmental context is associated with agriculture. This stems from a view of agriculture itself as in some way special, and also serves to distinguish this new strand of European agricultural policy from the more traditional productivist programmes that have characterized the bulk of the Common Agricultural Policy (CAP).1 Indeed, within European agricultural policy, one view of this strand of policy is that it provides policy makers with a sort of alibi enabling support for agriculture to be maintained in the face of possible trade disputes arising from the surplus production generated by the CAP. The question of how to design agri-environmental policy is made all the more difficult if one considers the significance accorded to agricultural support as a means of redistributing income. Although the CAP has hardly been an outstanding success in this regard (since large farmers have received most of the income transfers to agriculture), redistribution remains a legitimate concern of agricultural policy. Indeed, in some cases, such redistribution may be a prerequisite for achieving environmental objectives associated with agriculture and the rural landscape. EU MEASURES TO ADDRESS AGRICULTURAL EXTERNALITIES In the main, and reflecting the development of environmental policy in other contexts, the approach to addressing environmental problems...

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