Environmental licensing is a command-and-control (C&C) instrument used at the state level in Brazil to enforce compliance with legal requirements and environmental standards; however, it does not encourage continuous improvement. The objective of this paper is to propose a methodology that can be used as a licensing and monitoring policy for industrial activities, based on both command and control and economic instruments. Therefore, the development of a matrix to measure the environmental performance of companies is proposed so as to include mandatory compliance requirements, environmental management requirements and continuous improvement indicators. Performance assessment could be used by the environmental agency as a tool to support environmental management policy change by working with environmental incentives for better-performing companies. The results obtained with the matrix will demonstrate exactly what the theory describes: in an environment where the control imposed to the entrepreneur is by the attendance of a legislative standard and not the demonstration of continuous improvement, there is no evolution of the environmental performance over the 3-year period of the companies. Consequently, the inclusion of a tool to assess environmental performance constitutes a requirement for the environmental evolution of the country.
Keywords: Command-and control-instrument; Continuous improvement; Environmental licensing; Environmental performance.
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