Analyzing the Polluter Pays Principle Through Law and Economics

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Abstract
Any successful international negotiation for reducing emissions must be based on four principles: the precautionary principle, the principle of sustainable development, the polluter-pays principle of equity. The strength of ‘contraction and convergengce’ is that it satisfies all these principles. * Sir John Houghton
The paper starts with the basic knowledge of the Polluter Pays Principle and proceeds with the Historical evolution of the principle. The paper also deals with how the International and national development of the principle. The adoption of the principle in the legislation and judiciary is also dealt in detail in the paper. The later section of the paper deals with the disadvantages of the principle and ends with
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Finally, the polluter pays principles is now seen in specific pieces of legislation becoming more (or some might say ‘less’) than a grand constitutional statement of an intractable human right.

OECD – the birth of the polluter pays principle
Some explanation of the sometimes arbitrary course of the principle of polluter pays can be found in its historical development. The principle first appeared in a legal context in a document prepared by the international Organization for Economic Cooperation and Development (“OECD”) and included the following recommendation: “The principle to be used for allocating costs of pollution prevention and control measures to encourage rational use of scarce environmental resources and to avoid distortions in international trade and investment is the so-called ‘Polluter Pays principle’. This principle means that the polluter should bear the expenses of carrying out the above mentioned measures decided by public authorities to ensure that the environment is in an acceptable state. In other words, the cost of these measures should be reflected in the costs of goods and services which cause pollution in production and/or consumption. Such measures should not be accompanied by subsidies that would create significant distortions in international trade and investment”. In 2001, the OECD Joint Working Party on Agriculture and

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