In
environmental lawEnvironmental law is a complex and interlocking body of treaties, conventions, statutes, regulations, and common law that operates to regulate the interaction of humanity and the natural environment, toward the purpose of reducing the impacts of human activity...
, the
polluter pays principle is enacted to make the
partyA party is a person or group of persons that compose a single entity which can be identified as one for the purposes of the law. Parties include: plaintiff , defendant , petitioner , respondent , cross-complainant A party is a person or group of persons that compose a single entity which can be...
responsible for producing
pollutionPollution is the introduction of contaminants into a natural environment that causes instability, disorder, harm or discomfort to the ecosystem i.e. physical systems or living organisms. Pollution can take the form of chemical substances or energy, such as noise, heat or light...
responsible for paying for the damage done to the
natural environmentThe natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....
. It is regarded as a regional custom because of the strong support it has received in most
Organisation for Economic Co-operation and DevelopmentThe Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
(OECD) and European Community (EC) countries. In international environmental law it is mentioned in Principle 16 of the
Rio Declaration on Environment and DevelopmentThe Rio Declaration on Environment and Development, often shortened to Rio Declaration, was a short document produced at the 1992 United Nations "Conference on Environment and Development" , informally known as the Earth Summit...
.
The polluter pays principle underpins environmental policy such as an
ecotaxEcotax refers to taxes intended to promote ecologically sustainable activities via economic incentives. Such a policy can complement or avert the need for regulatory approaches. Often, an ecotax policy proposal may attempt to maintain overall tax revenue by proportionately reducing other taxes...
, which, if enacted by government, deters and essentially reduces the emitting of greenhouse gas emissions. Some eco-taxes underpinned by the polluter pays principle include: the
Gas Guzzler TaxGas-guzzler commonly refers to a vehicle that consumes fuel inefficiently.The term originally came into use in the US when congress established Gas Guzzler Tax provisions in the Energy Tax Act of 1978 to discourage the production and purchase of fuel-inefficient vehicles...
, in US,
Corporate Average Fuel EconomyThe Corporate Average Fuel Economy are regulations in the United States, first enacted by the U.S. Congress in 1975, and intended to improve the average fuel economy of cars and light trucks sold in the US in the wake of the 1973 Arab Oil Embargo...
(
CAFEA café , also spelled cafe, in most countries refers to an establishment which focuses on serving coffee, like an American coffeehouse. In the United States, it may refer to an informal restaurant, offering a range of hot meals and made-to-order sandwiches...
)- a "polluter pays" fine. The U.S.
SuperfundSuperfund is the common name for the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 , a United States federal law designed to clean up sites contaminated with hazardous substances...
law requires polluters to pay for cleanup of hazardous waste sites, when the polluters can be identified.
Polluter pays is also known as
extended polluter responsibility (
EPR). This is a concept that was probably first described by the Swedish government in 1975. EPR seeks to shift the responsibility dealing with waste from
governmentGovernment refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
s (and thus, taxpayers and society at large) to the entities producing it. In effect, it internalises the cost of waste disposal into the cost of the product, theoretically meaning that the producers will improve the waste profile of their products, thus decreasing waste and increasing possibilities for reuse and recycling.
OECD defines EPR as:
a concept where manufacturers and importers of products should bear a significant degree of responsibility for the environmental impacts of their products throughout the product life-cycle, including upstream impacts inherent in the selection of materials for the products, impacts from manufacturers’ production process itself, and downstream impacts from the use and disposal of the products. Producers accept their responsibility when designing their products to minimise life-cycle environmental impacts, and when accepting legal, physical or socio-economic responsibility for environmental impacts that cannot be eliminated by design.
Limitations of polluter pays principle
The U.S. Environmental Protection Agency (EPA) has observed that the polluter pays principle has typically not been fully implemented in U.S. laws and programs. For example,
drinking waterWater purification is the process of removing undesirable chemicals, materials, and biological contaminants from contaminated water. The goal is to produce water fit for a specific purpose...
and
sewage treatmentSewage treatment, or domestic wastewater treatment, is the process of removing contaminants from wastewater and household sewage, both runoff and domestic. It includes physical, chemical, and biological processes to remove physical, chemical and biological contaminants...
services are typically
subsidizedA subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
and there are limited mechanisms in place to fully assess polluters for treatment costs.