Now given that this is a waterway, and the previous discussions on MBI involves an example with waterways, ecolabeling, it would seem as if ecolabeling is perhaps a suited alternative. Now, firstly, ecolabeling example is a market friction instrument. Ecolabelling could be applied to fisheries. It could also be applied to some of the agriculture support at the South Esk basin. Ecolabeling can also be applied to the wood that is being cut down in the area and it can also be stamped on the lagoons that treat effluents and waste water before turning them out into the sea. Ecolabelling could hence be used to create awareness in the consumer about which of the products have been the most environmental friendly and also who has adopted the most sustainable practice (Ward and Phillips, 2008).
However, the ecolabelling initiative will put much of the onus of responsibility on the consumer. Not all consumers would be aware of ecolabels and not all consumers would have multiple choices to use, so they might end up choosing the best only as an alternative to the worst. On a similar note, the second MBI which is the rights or quantity based instrument can also be rejected. The rights or quantity based MBI cannot be applied properly because the measurement of water to use, or water that will be impacted exactly cannot be measured properly. If an industry is going to release some treated effluents, there will be some amount of impact on water, the quantity of water that will be impacted cannot be measured accurately (Raheem and Morenikeji, 2010).
The price based instrument would hence be the more appropriate instrument to apply here. In using the price based instrument, water tax or green tax could be applied here. Water tax based on a standard water exploitation index could be made use of here. Consider the water taxation project that was introduced in Netherlands in 1995 (Ecorys, 2011).According to the water tax as introduced, the country was able to apply taxation for ground water and tap water.