performance-based regulatory standard is a rule, regulation, or
standard that specifies the desired outcome but gives discretion in how
that outcome is met.
example, the Federal Railroad Administration (FRA) requires that
vegetation adjacent to railroad track be controlled so that it does not
become a fire hazard or obstruct visibility.
specifies an outcome (not being a fire hazard or an obstruction to
visibility) but not how far from the track vegetation must be removed
or the methods firms need to use to control it.
standards give discretion to regulated actors or firms. Regulated
targets may meet these standards in whatever way they choose. Such an
approach allows firms to innovate and search for the least costly means
of achieving the desired outcome.