Why do national governments enact pollution control laws?

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Why do national governments enact pollution
control laws?

• Scientific and ecological reasons Is all this
  regulation really scientifically justified?
• Behavioral reasons If everyone prefers a
  cleaner environment, why not rely on voluntary
  cooperation? Or private dispute resolution
  mechanisms to solve environmental disputes?
• Political reasons why not rely on local
  governments to regulate? After all, they are in
  the best position to balance development needs
  against pollution costs.

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• Market Failure
• Tragedy of the commons
• Race to the bottom

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• Market Failure
• Tragedy of the commons
• Race to the bottom

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• Alternative Approaches to Pollution Problems
• Command and Control Regulation
• 2. Incentives-based Regulation performance
  standards
• 3. Liability-based approaches (polluter pays)
• 4. Information Disclosure
• 5. Voluntary Codes

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Command and Control Model Pollution
Permitting Standards prescribe how much pollution
may be emitted, and under what circumstances, via
a permit Air pollution (e.g., Clean Air Act, or
CAA) Water pollution (e.g., German Federal
Water Act) How would you establish emission
standards if you were writing them?
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• Pollution Permitting What kind of standards?
• Technology-based What amount of pollution
  control is possible? Feasible? Economical?
• Fixed rule-based standards
• Relative case-by-case standards
• Why use rules? Case-by-case standards?
• Environmental Quality-based How much
  pollution can the receiving environment take?
  How much should it take?
• Which approach tends to be more stringent, do you
  think?

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Technology Based Standards in Air Pollution
Regulation
US CAA EU IPPC Directive BACT (clean
areas) BAT (everywhere) LAER (dirty areas)
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• German Federal Water Act
• a permit for wastewater discharge may not be
  granted unless such discharge satisfies certain
  minimum requirements best available technology
  which are to be met everywhere in Germany
  irrespective of the quality of the waters
  (uniform emission standards differentiated
  according to sectors of industry).
• More stringent requirements, and even bans on
  discharges, can in individual cases be imposed by
  water authorities in the light of immission
  considerations in order to safeguard the water
  quality envisaged for specific water uses.

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FED STDS, STATE ENF ENF
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Alternatives to Command and Control
Market-Based Regulation TOMORROW Taxes Marketable
Permits
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Alternatives to Command and Control
Self-Regulation
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• Environmental Auditing and Management
• What is environmental auditing? Why might firms
  spend resources on this task?
• What is environmental management? Why would
  firms want to use these techniques?
• What, if anything, should regulators do to
  encourage firms to use these techniques?

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ENVIRONMENTAL LAW Voluntary Codes International
Codes Voluntary Industry Codes ISO
14000 Responsible Care/CMA EMAS National
Voluntary Codes E.g., Netherlands How and why
do voluntary codes arise?
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Alternatives to Command and Control
Information-Based Rules

• Right to Know Laws
• Require firms to provide information about risks
  (of toxics they use) to
• Workers
• Public
• Regulators
• What good is a law like that? Does it stop
  pollution?

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Alternatives to Command and Control
Liability-Based Approaches

• Polluter Pays Liability
• What does it mean to make the polluter pay?
• Who should pay?
• one who violated the law by releasing hazardous
  material to the environment?
• What if polluter acted legally?
• one who acted carelessly?
• What if polluter was careful?

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• Polluter Pays Liability
• What does it mean to make the polluter pay?
• Who should pay?
• one who benefited by shifting pollution costs to
  the environment/society?
• Does company who generated wastes always benefit
  from improper disposal?
• One who benefits from cleanup?
• Landowner? Does it depend?

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• Polluter Pays Superfund
• Liable parties
• Nature of liability
• Defenses to liability

1-current owner 2-owner at time of
disposal 3-waste generator
4-transporter who selected disposal site
Strict, retroactive, and joint and several
Innocent purchaser
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• EU White Paper on Polluter Pays Liability
• The White Paper concludes that the most
  appropriate option would be a framework directive
  providing for strict liability for damage caused
  by EC regulated dangerous activities, with
  defences, covering both traditional and
  environmental damage, and fault-based liability
  for damage to biodiversity caused by
  non-dangerous activities.
• No retroactivity.

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EU White Paper on Polluter Pays Liability Who
is liable?

• The person (or persons) who exercise control of
  an activity (covered by the definition ofthe
  scope) by which the damage is caused (namely the
  operator) should be the liable party under an EC
  environmental liability regime. Where the
  activity is carried out by a company in the form
  of a legal person, liability will rest on the
  legal person and not on the managers (decision
  makers) or other employees who may have been
  involved in the activity. Lenders not exercising
  operational control should not be liable.

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EU White Paper on Polluter Pays Liability What
defenses?

• Commonly accepted defences should be allowed,
  such as Act of God (force majeure), contribution
  to the damage or consent by the plaintiff, and
  intervention by a third party (an example of the
  latter defence is the case that an operator
  caused damage by an activity that he conducted
  following a compulsory order given by a public
  authority).

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Nation 1 National Law Local Law Local Law
Multinational Corp. facilities EU Members
Nation 2 National Law Local Law
Nation 3 National Law Local Law
NGOs / Environmental groups local, national,
international