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The Polluter Pays: Noble Principle, but Weakly Implemented

The Polluter Pays: Noble Principle, but Weakly Implemented

Sunday, 27 March, 2022 - 04:45
Najib Saab
Secretary-General of the Arab Forum for Environment and Development (AFED) and editor-in-chief of Environment & Development magazine

The “polluter pays” principle has been associated with the environmental movement since its inception, although its interpretation and mode of application remain ambiguous. The declaration issued by the United Nations Conference on the Human Environment in Stockholm in 1972, whose 50th anniversary we celebrate on 5 June 2022, clearly embraced the principle of holding polluters responsible for their actions. It called for the inclusion of robust provisions in international environmental law that identify responsibilities and specify compensation to victims of pollution and environmental degradation.

In theory, the principle seems very logical, as it holds the party that causes pollution which is harmful to the environment and human health – be it an individual, a company, a group, public or private – responsible for its actions. But the problem lies in determining the acceptable thresholds and standards upon which the associated value of compensation can be calculated. Is the factory that produces the car, for example, responsible for the levels of pollution resulting from its manufacture and use, or rather the consumer who drives it, and how can the liabilities be divided?

Companies must abide by clear rules during production processes, so that use of resources and waste generated from factories remain within the permissible limits. But this requires clear and strict standards, which do not exist in all countries. Based on clear emission standards in the United States and Europe, Volkswagen was forced in 2015 to recall 11 million cars, and pay compensation worth 15 billion dollars in the United States alone, as a result of manipulating the electronic systems that measure the level of emissions from its engines. Cheating pollution emissions tests have cost the giant German company tens of billions in direct penalties, recalled cars and lost business. Matters like this rarely find their way to courts in Arab countries, due to the absence of laws governing the level of emissions that governments and consumers can use to build steadfast cases in courts. This does not absolve individual consumers of their responsibility for pollution, based on personal choices and behavior.

Speaking of air pollution from cars, it is worth noting that governments have been increasingly applying fairer structures to assign tax loads on car users. After years of adopting a mechanism for setting fees according to the level of pollutants emitted by the engine, and not just an engine’s size, some European countries have begun to link annual driving fees to the distance traveled. The more kilometers the car goes, the higher the toll it pays, linked to higher emissions. If this is considered a fair application of the “polluter pays” principle, it is also a measure that contributes to encouraging the use of public transport, car sharing schemes and avoiding driving long distances unless necessary.

International environmental law today incorporates the principle that whoever causes pollution and waste of natural resources bears responsibility for the damages, and therefore must pay the price. This is a type of “social tax” for any producer and consumer that causes harm to a third party. But this general principle has not, in most cases, been translated into laws and regulations. Despite all environmental laws, the United States still occupies the top rank in the consumption of single-use plastic, producing mountains of waste on land and in oceans, in the absence of adequate laws. Some Arab countries such as Morocco and the UAE have preceded the United States in this regard, where laws strictly prohibit the use of single-use plastic. It is hoped that the framework agreement approved by the United Nations Environment Assembly (UNEA) earlier this month will eventually set strict standards and binding restrictions to halt plastic pollution, especially in the oceans.

The application of the provisions of the “polluter pays” principle poses a problem in international law, related to the sovereignty of states over their resources within their borders, including the right to extract natural resources and determine acceptable levels of pollution. This raises questions on how to reconcile what is conceived as national rights on one hand, and general human rights on the other. Is this similar to the principle of “common but differentiated responsibility” adopted by countries on issues of climate change, to allocate burdens according to the capabilities of each country? While the “polluter pays” principle applies to individuals and companies, the “common but differentiated responsibility” principle includes relationships between countries, to determine their contribution to climate action according to their capabilities. When it comes to climate change, the “polluter pays” principle is equivalent to the “loss and damage” principle, as a basis for determining the value of compensation that industrialized countries should pay to developing countries, in return for the actual size of their historical contribution to carbon emissions responsible for climate change. This may be the biggest obstacle hindering the finalization of an international climate law, as industrial countries actively avoid clear acceptance of the principle of compensation for past damages.

The Stockholm Conference 50 years ago was not the first or the last occasion where the issue of distributing the costs of pollution and environmental degradation was raised. In the early twentieth century, court rulings in the United States and Canada required industrial companies to reduce harmful emissions to lower levels and forced them to pay compensation, especially for causing health problems due to air pollution. In 1968, the European Commission decided to charge polluters for the costs of losses resulting from their actions, and to compensate those affected. The Earth Summit, which was held in Rio de Janeiro in 1992, mandated that polluters, whether they are individuals, groups or companies, bear the cost of the damages resulting from their actions resulting in the pollution of air, water and soil. This same principle was also adopted by the Organization for Economic Cooperation and Development (OECD).

If the “polluter pays” principle enjoys such consensus, what then impedes its application? The devil is in the details of the declarations of principles and their fine print. These contain provisions placing restrictions on paying for pollution “if it harms public interest and international trade”. Even the United Nations Convention on Climate Change recognizes the right of countries to invest their natural wealth within their borders as they see fit. It is clear that these deceptively parenthetical phrases allow for making the principle of “polluter pays” devoid of meaning. It is hoped that details will not hinder the meaningful implementation of the plastics agreement, when execution plans are negotiated.

The fact is that a large part of the responsibility for pollution in poor developing countries lies with major multinational companies that take advantage of weak environmental laws to relocate their polluting operations to these countries, with the aim of producing cheap goods. Hence, international environmental law must impose standards, rules, provisions and penalties, regardless of the location where the products are made. One way is by dividing the environmental footprint between producers and consumers. Ultimately, poor countries should be supported to implement environmental safety requirements, beginning with helping them out of poverty. Only then can the burden of pollution costs be distributed fairly between consumers and producers alike.

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