Environmental concerns have been voiced with the expansion of trade under the NAFTA. A number of approaches have been suggested to ensure that the environment is protected under the agreement. These suggests, for the most part, fall into two broad categories: (1) command and control or (2) industry lead voluntary business initiatives. Each of these broad categories has its own set of advantages and disadvantages to provide the necessary incentives for producers to incorporate the environment into their production decisions.
Command and control policies follow the traditional regulatory approach that defines rules that are constraints on individual behavior. These constraints usually take the form of pollution standards or Pigovian taxes. However, standards and taxes are often difficult to enforce in the agricultural sector because of the non-point source nature of most agriculture pollution. As a result, many jurisdictions have chosen to define acceptable production practices that producers must adhere to.
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