In environmental law, the polluter pays principle is enacted to make the party responsible for producing pollution responsible for paying for the damage done to the natural environment. It is regarded as a regional custom because of the strong support it has received in most Organisation for Economic Co-operation and Development (OECD) and European Community (EC) countries. It is a fundamental principle in US environmental law.
According to the French historian of the environment Jean-Baptiste Fressoz, financial compensation (not named "polluter pays principle" at that time) is already the regulation principle of pollution favoured by industrials in the nineteenth century. He wrote that: "This principle, which is now offered as a new solution, actually accompanied the process of industrialisation, and was intended by the manufacturers themselves."
Applications in environmental law
The polluter pays principle underpins environmental policy such as an ecotax, which, if enacted by government, deters and essentially reduces greenhouse gas emissions.
The state of New South Wales in Australia has included the polluter pay principle with the other principles of ecologically sustainable development in the objectives of the Environment Protection Authority.
In France, the Charter for the Environment contains a formulation of the polluter pays principle (article 4):
Everyone shall be required, in the conditions provided for by law, to contribute to the making good of any damage he or she may have caused to the environment.
The polluter pays principle is also known as extended producer responsibility (EPR). This is a concept that was probably first described by Thomas Lindhqvist for the Swedish government in 1990. EPR seeks to shift the responsibility of dealing with waste from governments (and thus, taxpayers and society at large) to the entities producing it. In effect, it internalised 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.
The Organisation for Economic Co-operation and Development defines extended producer responsibility 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.
The waste management in Switzerland is based on the polluter pays principle. Bin bags (for municipal solid waste) are taxed with pay-per-bag fees in three quarters of the communes (and the recycling rate doubled in twenty years).
The principle is employed in all of the major US pollution control laws: Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act (solid waste and hazardous waste management), and Superfund (cleanup of abandoned waste sites).
Some eco-taxes underpinned by the polluter pays principle include:
In international environmental law
In international environmental law it is mentioned in the principle 16 of the Rio Declaration on Environment and Development of 1992.c
Limitations of polluter pays principle
The US Environmental Protection Agency (EPA) has observed that the polluter pays principle has typically not been fully implemented in US laws and programs. For example, drinking water and sewage treatment services are subsidized and there are limited mechanisms in place to fully assess polluters for treatment costs.