What is the Polluter Pays Principle?
The most prominent definition of the PPP was published by the Organisation for Economic Co-operation and Development (OECD) in 1974[1]:
“It is for the polluter to meet the costs of pollution control and prevention measures, irrespective of whether these costs are incurred as the result of the imposition of some charge on pollution emission, or are debited through some other suitable economic mechanism, or are in response to some direct regulation leading to some enforced reduction pollution”
Paragraph four of the guiding principles extends this point further, stating that the polluter should bear the expenses of preventing, or controlling, pollution “to ensure that the environment is in an acceptable state” [2]. This “acceptable state” is decided by public authorities. The principles were again extended through Principle 16 of the 1992 Rio Declaration to allow co-operating authorities to reclaim damage repair costs from polluters [3]. However, the Rio Declaration then somewhat undermines the influence of authorities by prioritising economic outcomes over environmental consequences; “the polluter should, in principle, bear the costs of pollution…without distorting international trade and investment”.
Application & Enforcement
The role of PPP in the 1960’s and 1970’s was to permit Local Authorities to recover reparation costs from polluters for environmental damage [4]. Today, the principle holds legal weight to target and punish those responsible. As such, the Environment Agency aims to “identify individuals, including company directors and managers, if it considers that a conviction is warranted and can be secured” [5]. However critics claim that “personal liability remains very much the exception rather than the rule in the U.K” [6]. PPP can be implemented via several methods; Process & product standards, individual regulation & prohibition, and, finally, levying various kinds of pollution charges [5]).
- Process and product standards – require manufacturers to monitor and alter operations which inflict damages upon the environment.
- Individual regulations and prohibitions – the setting of laws and regulations limiting the potential for pollution.
- Levying various kinds of pollution charges – enables local authorities to support firms implementing positive behaviours. It grants polluters the opportunity to invest in “environmental remediation or new local environmental projects [7].
Charges and fines remain the most prominent course of action against polluters however the actions of some polluters have warranted custodial sentences:
John Tapscott, a “persistent fly-tipper” was imprisoned for 16 months and banned from driving for 30 months under the Environmental Protection Act 1990. In another case, two Bradford men were sentenced to 20 months in prison for waste offences whilst an accomplice was given 100 hours community service [8].
The legal basis for bringing charges against businesses was a topic of debate. It was initially accepted that the business was a legal entity, operating under legislation over-riding the PPP. Today, those in senior management positions can face prosecution for pollution caused by the firm. Fines range from £10,500 (to Superior Seafoods for failure to implement recycling targets) to £4 million (for a port authority responsible for a 70,000 tonne oil spill resulting in a £100 million clean-up cost).
The Future for the Polluter Pays Principle
There have been suggestions on how to evolve the enforcement of the PPP from economic charges onto alternative punishments.
- The 2005 review of U.K enforcement of environmental legislation recommends greater opportunities for polluters to “invest in environmental remediation or new local environmental projects rather than to just pay fines” [7].
- Others suggest extending company accounts to include pollution as an additional output alongside production and consumption outputs [9]. By calculating a “physical pollution waste” output co-efficient, the authors “measure” the volume of pollution and waste produced from economic activity. This would allow firms to assign a cost per unit for the pollution incurred, returning the cost of pollution to the consumer. This is a method already applied to aviation with passengers paying for aircraft emissions.
Criticisms of PPP
The threat of personal liability is regarded as the “most effective way of improving corporate responsibility for the protection of the environment” [6]. However, these claims are disputed in regards to the “effectiveness” of the principle. Since 2000, local authorities have been responsible for upholding the PPP in their districts. The National Society for Clean Air (NSCA) in Scotland questions the ability of local authorities to successfully undertake their duties due to “the amount of financial [resources]…training and technical tools available for authorities to deliver” [10].
A second concern looks at the issue of “free-riders” [11]. Free-riders are those who use resources or create pollution without contributing to maintenance or repair costs. For example; road water run-off – contaminated with lead and rubber – is an endemic cause of water pollution throughout 25% of the UK. Without charging road-users for these clean-up costs, users can be classed as “free-riders”. How far should local authorities go to reclaim costs to abate pollution?
A third argument raises concerns on the legitimacy of criminal claims stating that the polluttee “can, and will, overstate the damage” [12]. The damage upon a polluttee cannot be known “since this is private information of the polluttee”. If exaggerated claims are brought against polluters, punishments may be un-proportional to the charge thus eradicating the legitimacy, utility and applicability of the PPP.
A fourth critique of PPP centres upon the punishments delivered to polluters. As stated, many of the punishments tend to be fines, custodial sentencing or demands to improve operational standards. A core concern regards estimating the economic cost of damage to be recovered from polluters in an accurate and justifiable manner. The difficulty in – for example – calculating a value of contaminated land, or the lost enjoyment of land-users, remains exceptionally difficult. In a similar thread, uncertainty remains regarding the proportion of reparation costs to be borne by polluters i.e. in 1999 the oil leak from the Sea Empress ship spilled 70,000 tonnes of oil. The polluters (port authority) were fined £4 million of the £100 million cleanup cost – 4%. Is this acceptable?
Finally, whilst the OECD now actively promote initiatives that provide polluters aid to “speed up” the design and implementation of cleaner initiatives and operations [2] – a preventative approach as opposed to reactive actions – economic success still seems to be an over-riding concern to environmental degradation; “If steps to protect the environment jeopardise social and economic policy objectives of a country or region, these policies will take precedence” [2]. This precedence of economic and social objectives seems to permit environmental damage if economic success is achievable. Does this eradicate the entire justification for the PPP in permitting environmental degradation before corporate responsibility?
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[1] Organisation for Economic Co-operation and Development. The Polluter Pays Principle (PPP). (1974). Paris.
[2] Organisation for Economic Co-operation and Development. The Polluter Pays Principle; Definition, Analysis and Implementation. (1975). Paris.
[3] Sands, P. (2003). Principles of International Environmental Law. 2nd Edition. Cambridge University Press. Cambridge.
[4] Coffey, C & Newcombe, J. (2001). The Polluter Pays Principle and Fisheries: The Role of Taxes and Charges. Institute for European Environmental Policy. London.
[5] Enforcement and Prosecution Policy. (2008). Document Number: EAS8001/1/1 Version 2. Environment Agency.
[6] Tromans, S & Thornton, J. (2001). Taking responsibility – Personal Liability under Environmental Law. Earthscan Publications Ltd. U.K.
[7] Review of Environmental Enforcement Unveiled. (2005). ENDs Report no.368. pp 6.
[8] Court in the Act. (2007). Your Environment. Issue 15. pp 12.
[9] Allan, G et al.,(2004). An Extension and Application of the Leontief Pollution Model for Waste Generation and Disposal in Scotland. University of Strathclyde.
[10] Scotland Making Slow Progress on Site Clean-Up. (2006). ENDs Report no. 374. pp 16.
[11] Scott, S. (1995). LRMC and Charging the polluter: The Case of Industrial Waste Water in Ireland. Utilities Policy. Vol. 5, No 2. pp 147-164.
[12] Wirl, F & Huber, C. (2005). Entitling the Pollutee: Liability versus Standard under Private Information. Environmental and Resource Economics. Issue 30. pp 287-311.
