Economic instruments and expenditures for environmental protection

Environmental pollution is a prime example of an externality of human activity. It reflects a market failure that requires adequate Government regulation of economic activity and the associated creation of incentives for pollution abatement and control. The main focus of the Government agenda in Georgia since 2004, however, has been on liberalizing and deregulating economic activity; and in this context the role of environmental policy in dealing with the external effects of economic activity in the form of pollution has effectively been ignored. The potential scope for more stringent environmental policy, which could have increased due to improving economic performance, has been curtailed instead. One possible reason for this appears to be concern about international competitiveness. Against this backdrop, the domestic resources devoted to financing environmental protection measures have remained inadequate. A main lack is the absence of information on private sector expenditure on pollution abatement and control. More generally, environmental protection has not been mainstreamed to any extent into the country’s development strategy for the economy as a whole.

Sustainable Development Goals:

Climate Action