The advantage of the carrot approach is that it is a positive way of motivating companies and works with almost everyone. A good incentive, acknowledgement, or any such thing can be presented as a good carrot for the companies to improve their productivity and work with better motive. It also creates a competitive work environment that is healthy as far as it does not create an obstacle.
The advantages of economic instruments or the carrots in particular are that they are not restricted to specific technologies or solutions. The decision of the approach is left to the target groups. They can judge and evaluate about whether they would prefer to control their process that can affect the society in a negative way or transform the approach of their business to suit the society. The economists and scholars have presented the idea that economic instruments are more or less pure alternative to more vigorous and control based regulations. Practically the economic instruments are implemented within a broader mix of regulatory instruments and in the general scenario of the institutions that are more complex than it seems in the partial analysis. On a better note, the economic instruments are not originated or decided by a single policymaker. Hence all necessary information is not controlled and all possible reactions are not anticipated.
On the contrary to the fixed approach to present a continuous incentive to increase the initiatives towards the environment and society and are as such a much more dynamic instrument.