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Polluter-pays principle

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Globalization has created its own market of trashy products, manufactured by global organizations which have few competitors on the world stage and, therefore, force consumers to accept mediocre quality, often containing dangerous contents. It is mostly the poor and those with budget limitations who are forced to buy such products made by manufacturing units where proper pollution control devices are lacking. When the poor purchase these cheap products, they indirectly contribute to environmental degradation. The direct contributors are the manufacturers.


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[edit] Polluting Parties Made Liable to Pay

The Polluter-Pays Principle (PPP), also known as Extended Polluter Responsibility (EPR), is a principle in international environmental law where the polluting parties are made liable to pay for the damages they cause to the natural environment. The objective of this principle is to shift the responsibility of dealing with waste from governments to the entities producing it. As the polluters receive no subsidies to help in this process, over time much of that cost is passed along to consumers in the price of the goods involved.

Under the same principle the World Wildlife Fund for Nature demanded that industrialized countries should compensate the developing countries which were struck by climate-related disasters, the way they compensate their own countrymen. Developing countries account for one-third of energy-related CO2 emissions but bear the brunt of pollution and climate change consequences.

[edit] Policy Approaches

The PPP is normally implemented through two different policy approaches:

Command-and-control approach

This approach focuses on preventing environmental problems by specifying how a company should manage a pollution-generating process. The approach lays down detailed regulations and an ongoing inspection program follows. In the United States, the Resource Conservation and Recovery Act (RCRA) is a prime example of this kind of regulation.

The alternative to "command and control" regulation is "performance oriented" regulation which specifies the environmental performance goals. This tends to be much more difficult to enforce because it requires an intimate understanding of the process and alternatives to the process.

Market-based approach

Manufacturers pollute the environment because it is available to them without cost. A market-based approach would charge a valid price to the producer for using the environment, rather than the zero prices which firms have been accustomed to. Under this method the Government can establish a discharge fee or tax which every polluter has to pay.

However, calculating the cost of pollution damages is extremely difficult. Therefore, choosing the correct tax level is fraught with difficulty. It is, therefore, felt that a quantity-based approach is much easier. At the international level the Kyoto Protocol, which requires the offending parties to bear the cost of reducing their greenhouse gas emissions, is an example of application of the PPP.


[edit] OECD Treaty

Mooted by the members of Organization for Economic Co-operation and Development (OECD) countries in the 1970s, the Polluter-Pays Principle was accepted by all governments of the OECD in 1972 and the Treaty of Rome was laid down later in 1995. In February 2004, European Union governments and lawmakers reached agreement on this new legislation and decided to establish a common framework for applying the polluter pays principle.

Thus the Agreement on New Directive on Environmental Liability aimed to prevent

1) environmental damage which many activities caused and in the process posed a risk to human health or the environment. It also aimed to prevent the manufacture, use, storage or transport of substances, products or goods which were subject to regulation under relevant EU industrial, chemical and environmental legislation.

2) biodiversity damage (i.e. damage to protected habitats and species as defined under the Birds and Habitats Directive, or as provided for by National legislation) which resulted from any other occupational activities whenever the operator has been at fault or negligent.

The treaty also recognizes that the burden of proof in demonstrating that a particular technology, practice or product is safe should lie with the developer, not the general public.


[edit] The Legislation

This legislation, however, does not cover nuclear pollution or marine oil pollution and limits liability for biological contamination from genetically modified crops. The legislation targets mostly sectors such as industries that generate large amounts of heavy metal waste, chemical manufacturers, waste disposal and incinerator operators. It also covers damage "which causes significant risk of harming human health" such as species and natural habitats, protected waters and land contamination.

Most economic activities (goods as well as services) involve various environmental impacts at the stages of producing, transporting, consumption or disposal. The polluter- pays principle requires that the costs generated by these environmental impacts have to be borne by the entities responsible for the environmental impact caused at each stage of the product’s life. One way of doing this is to internalize the environmental costs into the costs of activities and their market prices.

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