Reducing VOC emissions from solvents in Europe: the potential role of economic instruments

This paper considers the feasibility of harmonized use of economic instruments in environmental policy in the EU and Central and Eastern European Countries (CEECs). It is argued that the effectiveness of economic instruments in CEECs (which are already well developed in some of these countries) may be affected by the economic problems accompanying the transition process, by incomplete market reform in some countries and industries, by inefficiencies in public spending and by pre‐existing market distortions. The paper then focuses specifically on the example of a possible tax on solvents to reduce VOC emissions. A brief summary is given of the solvent – VOC policy issues and of the possible role of economic instruments. The potential environmental and economic impacts of a tax on solvents are considered, with special attention for three industries (paint, printing and pharmaceutics). The article concludes that in the present situation a differentiated tax (with lower rates in CEECs than in the EU) would be preferable to a uniform tax throughout Europe. Furthermore, the tax revenues should (at least in the CEECs) be used to support investments in (VOC) pollution abatement. © 1998 John Wiley & Sons, Ltd and ERP Environment.