The Polluter Pays Principle (ppp) and Its Effectiveness

The Polluter pays principle (PPP) basically means that the producer of goods should be responsible for the cost of preventing any pollution caused as well as remedy any damage so caused. It will include full environmental costs i.e. cost of pollution or any other harm caused to the ecology and not just those which are immediately tangible costs.

The polluter pays principle is preventive and compensatory in nature. It may entail fixing criminal responsibility on polluter, to make him make good the harm or pay eco-tax or carbon tax or at least participate in preserving environment in some way. The principle of polluters pay has been interpreted differently in different countries and there seems to be no common definition. For instance, some countries impose retrospective liability on the polluter and different countries have different definitions for who is a polluter and what constitutes pollution; range of costs to be borne by the polluter differs. It should also be noted that the above principle is more of a regional custom than part of international environmental law. The name of this rule is unnecessarily restrictive if taken literally. Pollution (harm associated with emission of wastes into environment) is only one of many forms of environmental degradation to which the rule has been applied.

Initially, PPP was interpreted only as government not doing the clean-up job for the polluters or the industries, but today the scenario has changed. The most popular interpretation of PPP is that apart from the government even the specific polluters should incur the responsibility for abating their contribution to a particular pollution problem. This is called equitable internalization. As polluters bear all the cost the distortions in international trade and investment arising from differential pollution abatement financing methods could be eliminated through the adoption of the PPP.

Even with all its success in Indian scenario, the polluter pays principle is not a cure for all of the world's environmental problems. It has a potential only for problems that stem from identifiable polluters who have sufficient economic resources to pay their way and even under the broadest definitions of pollution, the PPP cannot assist with serious environmental issues such as declining biological diversity or destruction of ecologically critical habitats. Other problems, though pollution related, are the aggregated consequence of the disparate actions of millions of individuals who are just trying to maintain a subsistence livelihood in overcrowded cities or decertified rural areas. The PPP would be inappropriate in such situations; these impoverished polluters are in no position to pay for their contribution to the world's environmental burden.

Most developing countries are yet to completely subscribe to the polluter pays principle as a major environmental policy guideline due to difficulty in implementing the same and due to its vague nature. The poor households, informal sector firms, and subsistence farmers cannot bear any additional charges for waste disposal while the small and medium-size firms from the formal sector, which mainly serve the home market, find it difficult to pass on higher costs to the domestic end-users of their products. Also, the exporters in developing countries usually cannot shift the burden of cost internalization to foreign customers due to elastic demand. Lastly, many environmental problems in developing countries are caused by an overexploitation of common pool resources.

Yet the Indian Judiciary and the recent national environment policy have enthusiastically applied the policy successfully on case to case basis. Its development into a well-rounded principle can only be judged with time but its present usefulness is very apparent.