Market-based environmental policy instruments

Market Based Measures are policy instruments that use market, price and other economic factors as incentive for polluters to reduce emissions. They are the type of regulations that encourage behavior through market signals rather than through explicit directives regarding pollution control levels or methods.

These policy instruments, such as tradable permits or pollution charges, are often described as "harnessing market forces" as they are designed to meet policy goals through actions that are also profitable or of interest to firms.