Geography and climate policy: a comparative assessment of new environmental policy instruments in the UK and Germany

New environmental policy instruments (NEPIs) (market-based instruments and environmental agreements) have moved to the forefront of environmental policy in recent years. From an economic theory perspective, NEPIs offer substantial benefits over ‘command-and-control’ regulation, yet empirical evaluations of their deployment and performance remain rare. This paper argues for a strong geographical contribution to this research agenda, utilising cross-national comparisons and actor-oriented perspectives to provide critical assessment and refinement of established NEPI theory. To illustrate this potential, this paper examines United Kingdom and German climate policy, using postal surveys and semi-structured interviews to assess corporate, industry association and policy-maker views on the effectiveness of eco-taxes, tradable permits and agreements in curbing greenhouse-gas emissions. Divergences between theoretical and practitioner perspectives on NEPIs are discussed, leading to suggested strategies for enhancing the environmental effectiveness of market-based instruments. The influence of national policy styles on NEPI design and industry reactions to these instruments was also identified as severely under-represented within economic theories of environmental regulation. Whilst industry assessments of environmental policy are unavoidably coloured by vested interests, cross-national and actor-oriented analyses nevertheless provide important insights into processes of policy diffusion and the strengths and weaknesses of different NEPIs.