Abstract: Market-Based Instruments can play an important role in tackling environmental problems in the GCC countries. As a means of achieving environmental management objectives, non-economic regulatory measures have been adopted worldwide as well as in the Gulf region. Now, economic instruments (EIs) are being increasingly implemented in many countries, both developed and developing.
Policy tools such as Command-And-Control (CAC) and EIs are used in various fields of life; however, in the environment field in the GCC, where there is urgent need to use both tools, the dependence has been solely on CAC.
Experience has shown that specific environmental problems are usually addressed by employing a “policy mix” consisting of various CAC instruments, EIs and awareness programs. This policy mix is needed to address various environmental issues too.
This research paper explains the difference between CAC and EIs, their role in environmental policy, and lists some examples of EIs along with selected international experiences. The paper also discusses GCC legislations and Multilateral Environmental Agreements in relation to CAC and EIs. Finally, the paper describes the prerequisites for applying EIs.