Environmental problems

Since the 1970’s there has been a massive shift from national environmental policy to EU policies. Environmental problems can be tackled from two angles. The first being that of treating pollution causes. The second, tackling the symptoms of pollution. Within these two areas are contained various approaches to dealing with environmental problems. These approaches have both advantages and disadvantages and this is what will be discussed within this essay. Two main approaches can be identified in which several attributes are included. These approaches are called ‘Command and Control’ and ‘Market Based’ approach.

The discussion will evaluate the different attributes and instruments available to each approach, focusing on their practicalities for the nation adopting those practices. We start by focusing firstly on the topic of dealing with symptoms of environmental problems, and more specifically, the command and control approach. The essence of this theory is the use of regulation. Regulation in itself can be broken down into its different forms such as prohibitions, maximum limits, directives and standards. These are the features that will be analysed closely.

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Standards can be defined as, “qualities that establish norms against which compliance or deviance is measured”1. Theses standards can be applied to all forms of pollution which is one of the benefits of using them. They are dictated by the EU but can also be introduced by national governments, as stated in the UK’s Environmental Protection Act 1990, “Secretary of State may establish limits for the total amount of any particular substance…. based on these limits, quotas may be allocated to persons carrying on processes involving the release of the substances,”2.

This is an effective tool against pollution. By being able to dictate how much a person or company is allowed to pollute directly results in a reduction of pollution in that State or area. The example of the UK whereby its own standards can be applied within EU standards, allows a stricter regime to occur if necessary. This is reflected in the Norwegian Pollution Control Act 1981, that states that no pollution is lawful where discharges are made into the environment, without the permission of local authorities3. The use of environmental standards can have many other positive knockon effects.

For example, by the EU giving a visible sign of approval to beaches that have a high standard of bathing water, areas that want to increase it’s tourism industry strive and work towards these signs of recognition. The defects though of using standards to counter pollution are varied, largely due to the large number of countries contained within the EU. When setting standard limits, say of emissions, the boundaries that are set may not be as low as possible due to the differences between the countries ability to meet targets.

For example, Germany is one of the world leaders in recycling, therefore how can a country like Greece achieve similar standards of recycling to them. This then puts the emphasis back on national Governments to set their standards within EU minimum and maximum limits. This process of standards then does not achieve as much as it possibly could because countries may set easy achievable limits to simply fulfil EU requirements, rather than be pushed to go further.

Another instrument contained within the bracket of regulation is the implementation of restrictions and prohibitions, “they are binding in their entirety and directly applicable to all Member States,”4. This quotation directly highlights one of the merits for using the tool of banning practices or products. Prohibitions do not need an act of transposition into national law where they may be diluted. They can be applied to every Member State, regardless of their economic strength or other non-relating factors.

Lists of banned or restricted practices and products are a flexible way of tackling environmental problems because they can be amended with ease with few complications,” lists avoid too much technical detail being included in the basic legislative or regulatory text,”5. The banning of products or substances is often a result of increased product standards, such as in the case of PCB’s and CFC’s. These instances highlight positive aspects resulting through the use of prohibitions. The major defect of relying upon prohibitions is the risk of non-compliance.

For practices such as dumping of waste it is extremely costly and difficult to police such behaviour. Also, there is often cases of leeway such as in the shipment of waste products, “Member States shall take appropriate legal action to prohibit and punish illegal traffic of waste,”6. This example shows that a Government in one country may punish a lot less severely than another nation for the same European crime, thereby making the crime possibly a risk worth taking in certain countries.

Directives and prescriptions are another way to approach treating the symptoms of pollution,” environmental directives tend to be of a general nature,”7. These rules can be applied by national Governments through either an Act of Parliament or through national law but must be applied to the whole country. The directive can be adapted regionally or locally if necessary. This flexibility allows Governments to apply EU rules but to their own extent,” directives address Member States and normally oblige them to act in a certain way,”8.

The position is that the directives are not demands or prohibitions but rules and guidelines. This can lead to a misinterpretation where expectations of results are not achieved because the Governments may not be fined or individuals are not fined for breaking the directives. There are other defects to using regulations to control pollution problems. One of these defects is that there are very few incentives for companies and individuals to work strictly to regulations, unlike in Sweden where rather that fine companies for polluting, they pay them to not pollute9.

There is often little profit to be made for companies to operate environmentally correct, and therefore many companies work to the highest limits that they legally can. The central core of the market based approach is the ‘polluter pays principle’. This idea was first stated in the 1973 ‘EC Action program, and later cemented in the ‘European Convention in Civil Responsibility for Damages Resulting from the Exercise of Activities Dangerous to the Environment 1974’.

The polluter pays principle has led to a number of tools being used, by national Governments on the whole, to ensure that rather than the public or Government pay, the companies or individuals who do the polluting pay directly financially. One way that this is done is through taxation, “there are various degrees or taxes that can be levied with the aim of affecting behaviour towards the environment,”10. Taxation can be implemented in a number of ways. One is directly onto polluting products such as petrol. This ensures those that drive, and therefore pollute are directly made to pay for doing so.

The advantage of this is that money obtained through this form of taxation is often reinvested in road quality therefore improving national infrastructure. Also the money is used on environmental research or nature conservation projects. Another example where taxation is used is through the taxation on discharges to the environment. This is common practice in France where firms are made to pay for substances released11. From a business point of view this is very much a disadvantageous way to control pollution12.

This tool may possibly affect foreign businesses setting-up in the nation if the taxes are perceived to be either too high or unfair. Taxation does very little to actually prevent pollution. For MNE’s who are saving millions of dollars by operating in countries like Greece, the charges for polluting are small compared to that amount they are saving in set-up costs etc. Therefore the amount of pollution actually being produced is quite unsubstantial. Permits and licences are tools used to treat the causes of pollution,” it is unlawful to carryout a process listed as polluting or potentially harmful without authorisation,”13.

Permits are used on businesses or individuals whose operations require a degree of pollution. Local councils assess the amount of pollution that is likely to be created before deciding whether a permit is to be issued. The advantage with this approach is that permitting can be as tight and stringent as necessary i. e. when dealing with nuclear waste the conditions of obtaining a permit are severe. Another merit for the use of permits is that they act as a middle-area between unregulated practices and absolute prohibitions.

As with taxation the main defect of permits is that they barely prevent pollution happening, but just obtain capital for the practice,” licensing controls are not designed to eliminate all pollution,”14. The issuing of permits may also be an expensive process. Quite often a whole department will be set-up to deal with the administration of permits, therefore countering the capital obtained through the selling of permits. A second type of permitting system is through the use of negotiable permits or ‘bubbles’. A level of pollution is agreed with a company and a relative charge delivered.

If a company then begins to operate consistently below these limits they may sell their permit to another company, whilst obtaining a new, cheaper permit for their new levels of pollution. The advantage of this approach is that companies will strive towards cheaper permits, therefore reducing their pollution output. If though the permit charges are deemed reasonable by the company, their is little incentive for them to reduce say, their emissions, because this may be a more costly alternative. The use of grants and subsidies in another market based tool available for the use of tackling environmental problems.

Companies are encouraged to operate in an environmentally friendly way by receiving such grants or subsidies as rewards, “in Sweden a wide range of grants are available to find measures that are not yet legally required,”15. Companies are much more likely to operate in a environmentally friendly way, if it results in financial rewards. If though the rewards that are given are dwarfed by the expense to operate in such a manner, then companies again will be reluctant to change their systems. Also, this style of pollution management is likely to prove extremly costly, primarily to tax-payers who will inevitably finance the grants. The establishment of a specific, autonomous set of rules to protect the environment in Western Europe is anything but easy since legal systems are different and the perception of environmental problems varies considerably”16. Has this quotation from 1997 been made less accurate from the introduction of the Euro and the closer integration of the EU as a whole? Fundamentally, no. The developement of EU Environmental Policy and it’s impact on EU Member States is increasing, but is still very difficult to implement in most areas, such as waste dumping.

The need for an equilibrium between command and control approaches and market based strategies is crucial. Command and control approaches can be thought of as most effective in their overall environmental effectiveness, their administrative cost and EU wide adaptability. Whilst market based approaches can be seen to be best in terms of economic efficiency in terms of cost to non-polluters, and cost effectiveness because their implementation and maintenance costs are lower.

With the news in the last few days that the EU is to implement a’polluter pays’ legislative bill concerned with recycling17, this idea of an equilibrium of the two approaches can clearly be understood. Within this essay, the merits and defects of the main approaches in tackling environmental problems have been discussed. The instruments and tools available through both EU legislation and national law allow environmental problems to be tackled from two fronts, treating the symptoms of pollution and tackling the causes of pollution. These instruments and tools produce both positive and negative results and it is these results that