The Polluter-Pays
Principle (PPP)
The Polluter-Pays Principle (PPP) means that the polluter
should bear the expenses of carrying out the pollution prevention and control
measures, in order to ensure that the environment is in an acceptable state.
The polluter pays principle (PPP) is a
economic idea that firms or consumers should pay for the cost of the negative
externality they create.
The polluter pays principle usually refers to the
environmental costs. However, in the general cases, these environment cost
could be extended to any external cost, whether than the private cost to the environment, but also the social cost of
some goods are greater than the private cost.
This requires some
authority or government agency to calculate our external costs and make sure
that we pay the full social cost. Petrol tax cold be a good example for the
polluter pays principles. When people purchase petrol, they will create the
damages or pollution to the environment and the government will need to
calculate the expense for the consumers.
The tax means the price we pay more closely reflects the social cost.
The polluter pays principle was
incorporated into the 1992 Rio summit The declaration stated:
Principle 16: “National authorities should
endeavor to promote the internalization of environmental costs and the use of
economic instruments, taking into account the approach that the
polluter should, in principle, bear the cost of pollution, with
due regard to the public interest and without distorting international trade
and investment.”
Some of the environment issue are hard to be charged by the polluter
pays principle. Green gas could be a example. Because the green gas has been
slow to recognize the link to the climate change, and the atmosphere is considered to be a
global commons, the government could not find the polluter to pay the expense. Recently,
a new concept called carbon price could
help the government to charge the firms.
Haze in Beijing, China
Source: http://www.theguardian.com/environment/2012/jul/02/polluter-pays-climate-change
