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THE EMERGENCY OF 1975-1977

The Emergency Of 1975-1977


Project submitted to:
Dr. Avinash Samal
(Faculty of Political Science)

Submitted by:
Rohit Mohan
Section-A
ROLL NO. 116
SEMESTER- I
Date-17/10/2013

Hidayatullah

National

Law

Chhattisgarh

University

Raipur,

THE EMERGENCY OF 1975-1977

ACKNOWLEDGEMENTS
I am highly elated to work on the topic, The Emergency Of 1975-77. At the outset, I would
like to express my heartfelt gratitude and thank my teacher, Dr. Avinash Samal for putting his
trust in me and giving me a project topic such as this and for having the faith in me to deliver.
My gratitude also goes out to the staff and administration of HNLU for the infrastructure in the
form of our library and IT Lab that was a source of great help for the completion of this
project.
I would like to thank my family and friends for their constant support and motivation which
urged me to work hard on this topic.
Rohit Mohan
Semester - III

THE EMERGENCY OF 1975-1977

TABLE OF CONTENTS

1.

INTRODUCTION..........................................................................................................................1
1.2.1. Aims and Objectives ....................................................................................................1
1.1 Research Methodology..........................................................................................................2

2. THE FRAMERS RATIONALE.........................................................................................................3


3. REASONS FOR THE PROCLAMATION............................................................................................5
4. NINETEEN MONTHS OF EMERGENCY..........................................................................................9
5. EFFECTS OF THE EMERGENCY...................................................................................................12
6. CONCLUSION.............................................................................................................................14
BIBLIOGRAPHY...............................................................................................................................15

THE EMERGENCY OF 1975-1977

EXECUTIVESUMMARY

"Thepolluterpaysprinciplestatesthatwhoeverisresponsiblefordamagetotheenvironmentshould
bearthecostsassociatedwithit."(TakingAction,TheUnitedNationsEnvironmentalProgramme.)

Fewpeoplecoulddisagreewiththepropositionthatthosewhocausedamageorharmto
othersshould"pay"forthosedamages.Itappealsdirectlytooursenseofjustice.
Forcingpolluterstobearthecostsoftheiractivitiesisalsosaidtoenhanceeconomicefficiency.
Appropriatelyapplied,policiesbasedonapolluterpaysprinciple(PPP)shouldenableustoprotect
theenvironmentwithoutsacrificingtheefficiencyofafreemarketeconomicsystem.

Acorrectinterpretationofthepolluterpaysprinciplewoulddefinepollutionasanyby
productofaproductionorconsumptionprocessthatharmsorotherwiseviolatestheproperty
rights of others. The polluter would be the person, company, or other organization whose
activitiesaregeneratingthatbyproduct.Andfinally,paymentshouldequalthedamageandbe
madetothepersonorpersonsbeingharmed.
Inanimateobjectsandtheenvironmentdonotincurcosts,peopledo.Itisnotmerelythe
physicalpropertythatisbeingdamaged,buttheinterestsoftheowner.However,mostadvocates
ofPPPrarelytalkaboutharmtopeople.Instead,theymisappropriatetheeconomictheoryby
redefining the concepts of cost and damage to apply to things rather than to people. The
statementaboveistypical.Pollutersaresaidtobethosewho"damage"orimpose"costs"onthe
environment.

THE EMERGENCY OF 1975-1977

Thus, environmentalists define a "polluter" far more broadly, not as someone who is
harmingothers,butoftenassomeonewhoissimplyusinghisownpropertyandresourcesina
way that offends the environmentalists. Because, in such cases, there are no victims to
compensate, the amount to be paid is determined by the extent to which it will deter the
politicallydisfavoredactivity.Thepayment(whethertherearerealvictimsornot)typicallygoes
to the government in the form of a tax. In such cases, the PPP is used to promote an
environmentalagendaratherthantoinsurethatrealpolluterspaycompensationtorealvictimsof
theiractivities.
"Damagetotheenvironment"and"coststotheenvironment"arenebulousandsubjective
conceptswheretheuseofanyresource,includingtheair,waterandonesownproperty,canbe
definedasharmingorpotentiallyharmingthatresourceandthereforetheenvironment.
i

Ultimatelysinceallhumanactivityinvolvesaltering(damaging?)thenaturalenvironment,the
PPP as definedbyits mostvocal advocates canbe invokedas ajustificationfortaxingall
consumptionandproductionactivities.
Theuseof"marketbasedinstruments"toenforcethesearbitrarycurtailmentsoftheuseof
property are often justified on the grounds of "economic efficiency." Instruments such as
tradableemissionspermitsaresaidtoresultinlessmisdirectionofresourcesthancommandand
controlsolutionstopollutionproblems.However,whenthefundamentalconceptofpollutionis
misguided,andthetargetreductionsaremadearbitrarilywithoutthebenefitofmarketsignalsas
tothecostsofproductionorthewishesoftheconsumers,noinstrumentisefficient.
Environmentalproblemsoccurbecausethereisaconflictovertheuseofaresource.When
wethinkofdamagetopropertywearenotsimplyspeakingaboutthealterationofoneoranother
ofitsphysicalaspects,weareinfacttyingthatpropertytoanownerandtheusesthatheorshe
mayhaveplannedforit.
Inordertodecidewhoisthepolluterandwhoshouldbepaidonemustfirstknowwhohas
rightstotheresourcewhoseuseisindispute.Therearesituationswhereownershipisindispute
orpropertyrightsareundefined.Theseproblemsneedtobeclarified,eitherinthecourts,asis
typically the case when there are disputes over property rights, or legislatively, as may be
necessarywhenrightsarecompletelyundefined,asmightbethecasewithrivers,theocean,etc.
Unfortunately,thepolluterpaysprinciplethatiscurrentlyguidingpublicpolicyhaslostthe
conceptthatenvironmentalproblemsareessentiallyaboutinterpersonalconflictsovertheuseof
property.Thenotionofpropertyrightsastherightsthathumanbeingshavetopropertyhasbeen
replacedwiththeideathatsomehow thepropertyitselfhasrights thatarebeingviolatedby
productivehumanactivity.Themisappliedprincipleismuddyingthewaters,sotospeak,in
many environmental discussions, including those surrounding greenhouse gas emissions and
globalwarming,solidwastedisposalandtheuseofvirginmaterials,andcleanwaterandair.

Theseerrorsleadtotheillogicaldefinitionofapolluterassomeonewhocausesdamageto,
or imposes costs, not on others, but on the environment. Since the environment cannot be
compensateddirectly,thismakesforanexcusetoimposetaxesontheoffendingparties,which,
ofcoursearetobeusedto"undothedamage."Ultimatelythough,these"payments"enhancethe
incomesofahostofgovernmentbureaucrats,consultants,andlawyers,allofwhombenefitfrom
theprocess.Thepolluterpaysprincipleasitiscurrentlybeingadvocatedendsupbeingawealth
transferfromnonpolluterstopoliticallywellconnectednonvictims.
Apropertyrightsbasedpolluterpaysprinciple,ifimplemented,wouldsolvemanyofthese
problems by enforcing existing property rights and providing principled guidance for the
privatizationofcurrentlyunownedresourcesbycourtsandlegislatures.Itwillbemucheasierfor
law makers andadjudicatorsofdisputestomoveintherightdirectiononcetheproblemis
clearlyidentified.

ii

ThePolluterPaysPrinciple:
AProperGuideforEnvironmentalPolicy

ByRoyE.Cordato,Ph.D.*
"Thepolluterpaysprinciplestatesthatwhoeverisresponsiblefordamagetotheenvironment
shouldbearthecostsassociatedwithit."1

Fewpeoplecoulddisagreewithwhatseemsatfirstglancetobesuchastraightforward
proposition.Indeed,properlyconstrued,thisisnotonlyasoundprinciplefordealingwiththose
whopollutebutisanextensionofoneofthemostbasicprinciplesoffairnessandjustice:people
shouldbeheldresponsiblefortheiractions.Thosewhocausedamageorharmtootherpeople
should"pay"forthatdamage.Thisappealtooursenseofjusticeiswhythe"polluterpays
principle"(PPP)hascometoresonatesostronglywithbothpolicymakersandthepublic.
Asageneralrule,soundeconomicanalysisofpollutionandenvironmentalproblems
mustalsobebasedontheprincipleofresponsibility.Forcingpolluterstobearthecostsoftheir
activitiesisgoodeconomicstoo;itnotonlyadvancesfairnessandjustice,butalsoenhances
economicefficiency.Inotherwords,withappropriatepoliciesbasedonaPPP,weshouldnot
havetogiveuptheeconomicefficiencyofafreemarketsystembasedonprivatepropertyin
ordertoobtainenvironmentalprotection,norviceversa.
Butaswithmostsuchgeneralprinciples,thedevilisinthedetails.Inthiscase,the
detailsrelatetothreebasicquestionsthatanyapplicationofthePPPmustanswer.First,howdo
wedefinepollutionandthereforeapolluter?Second,howmuchshouldthepolluterpay,oncehe
isidentified?Third,towhomshouldthepaymentbemade?Theanswerstothesequestionsareat

theheartofwhetheranyapplicationofthePPPwillbeeitherjustoreconomicallyefficient.

A correctly construed polluter pays principle would penalize those who injure other
peoplebyharmingtheirpersons,orbydegradingtheirproperty.
Toooften,however,thePPPismisdefinedandmisusedtosuppressprivateeconomic
activitythatbenefitsthepartiesdirectlyinvolvedanddoesnospecificdamagetootherpeople,

TheauthorisVicePresidentforResearchandResidentScholar,JohnLockeFoundation.

TakingAction,Chapter2,p.3.PublishedbytheUnitedNationsEnvironmentalProgramme[sic],foundat

www.rona.unep.org.action.02.htm.

butwhichoffendsthosewhoopposehumanimpactontheenvironmentandprefertoleave
resources undeveloped. The objective is to restrain the resource use at the expense of the
propertyownersandconsumerswithoutcosttothosewhowishtoseetheresourcesremainidle.
UndersuchamisapplicationofthePPP,veryoften"apolluter"isnotsomeonewhois
harmingothers,butissomeonewhoissimplyusinghisownpropertyandresourcesinawaythat
isnotapprovedofbygovernmentofficialsorenvironmentalists.Insuchcasesthereisnoharm
tobemeasuredandnorealvictimstocompensate.Consequently,theamounttobepaidisnot
determinedbytheextentofanyactualdamagedone.Rather,itissetatalevelthatcurbsthe
politicallydisfavoredactivitytothedegreedesiredbyitsopponents.Andfinally,thepayment
(whethertherearerealvictimsornot)typicallygoestothegovernmentintheformofatax.In
otherwords,inmostcases,thePPPisusedascovertopromoteapoliticalorideologicalagenda
ratherthantoensurethatrealpolluterspaycompensationtorealvictimsoftheiractivities.
I.DamagetoPeoplevs.DamagetotheEnvironment
MostadvocatesofPPPrarely,ifever,talkaboutharmtopeopleorindividuals.Tomany,
pollutersarenotnecessarilythosewho,throughtheirproductionorconsumptionactivities,do
damage to the persons or property of others. Polluters are those who "damage" or impose
"costs"ontheenvironment.Thequotationatthestartofthispaperexpressesthatconcept.
This language in describing the PPP is seen repeatedly. The Rio Declaration on
EnvironmentandDevelopmentstatesthat"Nationalauthoritiesshouldendeavortopromotethe
internalizationofenvironmentalcosts[via]theuseofeconomicinstruments..."(moreonthis
below). The "Draft International Covenant of Environment and Development, IUNC, 1995"
states,"Partiesshallapplytheprinciplethatthecostsofpreventing,controlling,andreducing
potentialoractualharmtotheenvironmentaretobebornebytheoriginator."2
Thesearenebulousandsubjectivetermsunderwhichtheuseofanyresource,including
theair,waterandonesownproperty,canbedefinedasharmingor"potentiallyharming"that

resourceandthereforetheenvironment.Doesstripminingorestablishingalandfilldamagethe
environment or simply make use of it? Ultimately, all human activity involves altering
(damaging?)thenaturalenvironment.Therefore,thePPPasdefinedbyitsmostvocaladvocates
canbeinvokedasajustificationfortaxingallconsumptionandproductionactivities.
ThePPPcanbecarriedtoextremesbyadvocatesofpopulationcontrol.Justbyexisting,
weall"harm,"i.e.,change,thenaturalenvironment.Doesthatmakeeachofusapolluterwho
mustbemadeto"pay?"Doesputtingcarbondioxide(essentialforalllifeonearth)intothe
atmosphereconstitute"polluting"theair?Arehumanspollutingtheairwhenweexhale?Should

These quotes are from The Earth Charter Initiative: Resource Materials, at

www.earthcharter.org/report/survey/survey20.htm,undertheheading"ThePolluterPays."

we limit population growth through restrictions on procreation (as with the Chinese
governmentsonechildpolicy)?
II.PolluterPays,"MarketBased"Instruments,andDamagetotheEnvironment
Closely tied to the PPP are policies typically grouped under the heading of "market
based" or "economic" instruments,3 which are broken down into two categories, taxes and
tradablepermits.Bothareseenasattemptsto"makethepolluterpay"byattachingafeetothe
pollutingactivities.
Thetaxationapproachismostdirect.Thetaxwouldbepaideitherintheformofan
emissionsfeeoranexcisetaxonthesalesofproductsthatareassociatedwithpollution.The
tradablepermitsapproachwouldfirsthavethegovernmentestablishanoverallacceptablelevel
ofemissionsforanindustryandwouldthendistributepermitsforthatlevelofemissionsto
companieswithintheindustry.Thecompaniescouldthenbuyandselltheseemissionspermits
based on their needs to emit the pollutant and their abilities to find pollution abatement
techniques.
Bythesemeans,thepolluters(ortheircustomers)aremadeto"pay"fortheirpolluting
activitieseitherthroughatax,throughthepurchaseofpermitsfromothersintheindustry,or
throughtheuseoftheirownassignedpermits(foregoingthecashthatcouldbeearnedbyselling
them).Inthefirstinstancethe"payment"isestablishedbyandmadetothegovernment.Inthe
lattercasesitisestablishedbythesupplyanddemandconditionsinthemarketforpermits.
A."HarnessingMarketForces"fortheEnvironment
Whilethepresumedmoralcaseformarketbasedinstrumentsisgenerallycenteredonthe
conceptofmakingthepolluterpay,theeconomicjustificationfortheseinstrumentsisthatof
efficiency.Thatis,usingmarketbasedincentivestoaccomplishenvironmentalgoalsisassumed
tobemoreefficientthantraditionalcommandandcontrolpolicies.

AsarguedbytheWorldResourceInstitutesDuncanAustin,"economicinstruments,
whichaimtocontrolpollutionbyharnessingthepowerofmarketincentives,offeramorecost
effective,flexible,anddynamicformofregulationthanconventionalmeasures." 4Thisnotionis
tieddirectlytothePPP.Theoretically,bymakingpolluterspay,youarealsomakingthem

Forexample,whensearchingtheWorldResourceInstitutewebsite,www.wri.org,formaterialonthe"polluter

paysprinciple,"oneofthefirstarticlestoappearisDuncanAustin,"EconomicInstrumentsforPollutionControl
andPreventionABriefOverview,"WorldResourcesInstitute,September1999.Thisconnectionisalsomadein
theacademicliterature.SeeDavidPearce&R.KerryTurner,"PackagingWasteandthePolluterPaysPrinciple:A
TaxationSolution,"JournalofEnvironmentalManagementandPlanning,Vol.35,No.1,1992.

Ibid.,p.1.

take into consideration the pollution costs associated with their production activities. This
encouragesthemoreefficientuseofresourcesoverall,whileprovidinganincentiveforpolluters
tofindthelowestcostmethodsforreducingemissions.
Theproblemwiththistheoreticalapproachisthat,inadvocacyandpractice,theconcept
ofcostistwistedtomeanmorethanactualdamageinflictedonthirdparties.Toofrequently,the
payment that PPP advocates would impose or the degree of cutback that is mandated is
calculatedtoreducetheactivityinquestiontothedegreedesiredbytheopponentsoftheactivity
ratherthantotheextentwarrantedbytheactuallevelof"externalcosts"associatedwiththe
activity.
Economics,beingabehavioralandsocialscience,attachestheconceptofcoststohuman
beingsandindividualdecisionmaking."Cost"referstowhatmustbegivenupwhenaperson
choosesonecourseofactionasopposedtoanother,orwhensomeoneelsesactivitiespreventa
personfromchoosingonecourseofactionratherthananother.Economictheoryarguesthat
efficiency,i.e.,socialwelfare,willbemaximizedwhenproducerstakeintoaccount all ofthe
costsinvolvedinmakingtheproduct(includingthecoststheyincurthemselvesandthosethey
imposeonotherpeople)astheydecidehowmuchtoproduceandhowmuchtocharge.
Forexample,inthecaseofacompanythatispollutingariver,thecostmightbeto
downstreamrecreationaluserswhohavetogiveuporcutbackoncertainactivities:swimming,
fishing,etc.Theircostwouldbethevaluethattheyplaceontheactivitiesthatthepollutionis
preventingthemfrompursuing.Fromthisperspective,then,pollution"problems"arisebecause
thepolluterisimposingcostsonotherhumanbeings.Itisthehumanusersoftheriverwhobear
thecosts,nottheriveritself.
Theapplicationofapolluterpaysprinciplethataccuratelyreflectstheeconomictheory
ofcostswouldhavetoincludetheidentificationofavictimandcompensationtothatvictimby
theoffendingparty.Aneconomicnotionof"damage"wouldbedirectlylinkedtothisviewof
costs.Allpollutiondamageswouldrelatetocoststhatareimposedonothers,eitherbydirectly

causingthemphysicalharmorbysomehowdeprivingthemtheuseoftheirproperty.
Many advocates of market based instruments and PPP misappropriate the economic
theorybyredefiningtheconceptsofcostanddamagetoapplytothingsratherthantopeople.
Inanimateobjectsandtheenvironmentdonotincurcosts,peopledo.5

For an interesting discussion of this notion, see Aaron Wildovski, "Accounting for the Environment,"

Accounting,Organization,andSociety,Vol.19,No.415,1994,pp.461481.

B.PolluterPaysinPractice:AShipWithNoRudder
Asonewouldexpect,thenebulousconceptsofdamageandcoststotheenvironment
haveallowedpolicymakersandadvocacygroupstoidentifypollution,andthereforepolluters,in
completely arbitrary ways. Because ofthis, the PPP has been invoked as a justification for
policies that advance neither economic efficiency nor justice and that often subvert sound
science.Rather,thePPPasitiscommonlyinvoked,becomesatoolforthosewhoseektoexpand
public sector control over the use of natural resources, or who want a rationale for taxing
activitiesthattheydontlikeandencouragingthosethattheydo.
1.NonRecyclers:PollutersWhoMustPay?
Aroundtheworld,thePPPisbeinginvokedasajustificationtoencouragerecyclingin
solidwastedisposalanddiscouragetheuseofvirginmaterialstreesforpaper,petroleumfor
plastics, iron for steel, etc. in manufacturing. Proposals range from taxing the use of
packagingmaterials,suchasglassandpaperproducts,toestablishingtradablepermitprograms
basedonanoverallrecycledcontentstandardforcertainkindsofmanufacturing.
Inadvocatingsuchproposals,itissimplyassertedthatnotrecycling,i.e.,usinglandfills
orincineratingwaste,isbydefinition"damagingtotheenvironment."Therefore,thosewho
choosenonrecyclingmethodsofwastedisposalorusenonrecycledmaterialsinproductionare
saidtobecontributingtopollutionproblemsandmustbeforcedtopay.Butsayingthattheuse
of virgin materials alters nature and therefore "imposes costs on the environment" fails to
establishthatanyoneishurt,or,iftheyarehurt,theamountofinjurytheysuffer.Therefore,the
goaloftheseproposalsseemstohavenothingtodowithidentifyingpollutersandtheirvictims
andarrangingcompensation.Instead,itissimplytoreducetheuseofvirginmaterials,landfills
andincinerationforitsownsake.
For example, in "Packaging Waste and the Polluter Pays Principle: A Taxation
Solution,"6authorsDavidPearce&R.KerryTurnercallforexcisetaxesontheuseofbeverage

containers.Thetaxwouldbeleviedeitheronthevirginmaterialsthatgointothepackagingoras
ataxonthesaleofthebeveragepackagedinthecontainer.Theirclaimisthat"environmental
damagefrompackagingwasteisnotreflectedinthepricesofpackagedproducts"andthat"the
size of the levy needs to be related directly to the environmental damage done by the
production and consumption of the packaging, or to the costs of restoration to the
environment"7 (emphasis added).Yetonecansearchtheentirearticle,whichappearedina
prestigiousacademicjournal,andfindnoprooforevenamentionofactualcostsordamageto
peoplefromtheuseordisposalofthebeveragecontainersbeingtaxed.Consequently,underthis

Op.cit.atnote3.

Ibid.,p.6.

scheme,the"polluters"paynocompensationtoanyonefordamages.Indeed,theauthorargues
thatprogramssuchasthisneedtoraiserevenueforthegovernmentbecauseagooddealof
recyclingtendsnottobeprofitable.Thatis,recyclersareactuallycharginglocalgovernmentsfor
reprocessingthewasteratherthanpayingthemforaccesstoit,becausetheycannotrecovertheir
fullcostsbysellingtherecycledoutput. 8Presumablytherevenueswouldbeusedtosubsidize
recyclingandtheuseofrecycledmaterials.
StavinsandGrumblyintheirarticle,"TheGreeningoftheMarket:MakingthePolluter
Pay,"inMandateforChangefromtheProgressivePolicyInstitute,9argueforatradablepermits
schemetopromoterecycling.Undertheirplantomakethe"polluterpay,""thegovernment
wouldsetanindustrywide...recycledcontentstandardwhichindividualfirmscouldmeetin
oneoftwoways:Theycouldusetherequiredpercentageofsecondarymaterials,ortheycanuse
fewer secondary materials and buy permits from other firms that exceeded their recycling
requirements."10Theunderlyingassumptionisthattoproducecertainproductswithvirginrather
thanrecycledmaterialsisautomaticallytobeapolluter.Again,novictimsofthispollutionare
identified,andifthereisnovictim,thereisnojustificationfor"compensation."
2.GlobalWarmingandPPP
Asnoted,theconceptofcostineconomicsimposesarealconstraintonwhomaybe
calledapolluterandwhetherandhowmuchsuchapollutershouldpay.Becauseonlypeoplecan
bearcosts,theexpressions"coststotheenvironment"and"damagetotheenvironment"haveno
validmeaningunless theyaresimplyeuphemismsforcostsordamagetopeople,i.e.,their
personorproperty.UnderthePPP,astypicallyinvoked,thisconstraintiscompletelyignored.
Consequently,environmentaladvocatesinandoutofgovernmentfeelfreetodefineaspollution
theemissionsofalmostanysubstanceintotheairorwater,evenonesthat,accordingtoscientific
evidence,arenotharminganyone.Inreality,notallbyproductsoftheproductionprocessare
pollutantsandnotallusesofthenaturalenvironmentharmpeople.

Themostcurrentexampleofthiscarelessconceptofcostisheardindebatesaboutthe
allegedproblemofglobalwarmingandwhat,ifanything,shouldbedonetoreduceemissionsof
carbondioxide.Fromtheearlydiscussionsofthisissueinthelate1980sandearly1990s,the
polluterpaysprinciplehasbeeninvokedastheguidingforcebehindthemostoftendiscussed
publicpolicyremediestotheproblem.Forexample,tradablepermitstocurbgreenhousegases

Ibid.,p.7.Thisimpliesthatrecyclingismorecostlythanothermethodsofwastedisposal.Sinceproduction

costsareameasureofthevalueofresourcesthatgoesintoaprocess,theimplicationisthatrecyclingusesup
resourcesthataremorevaluablethanthosethatwouldbeusedinothermethodsoftrashdisposal.

RobertStavinsandThomasGrumbley,"TheGreeningoftheMarket:MakingthePolluterPay,"in Mandatefor

Change(Washington,D.C.:TheProgressivePolicyInstitute),1993,pp.203206.

10

Ibid.,p.211.

wereadvocatedasapracticalapplicationofthePPPbyMandateforChange(whichwaswidely
seenasthepolicyguideforMr.Clintonduringhis1992campaign). 11Andindeed,insigningthe
KyotoProtocol,theClintonAdministrationendorsedtheuseofatradablepermitsprogram.(The
UnitedNationsagreementknownastheKyotoProtocol,ifratifiedbytheSenate,wouldcommit
theUnitedStatestodrasticreductionsinCO2emissions.)
TypicalofmostPPPadvocates,supportersoftheKyotoagreementandtradablepermits
haveshunnedanyattempttocometogripswiththeactualsciencethatneedstobeinvokedwhen
determiningwhetherornotCO2emissionsingeneralarelikelytocauserealdamagetopersons
orproperty.Furthermore,thereisnoevidencethatthelevelsofCO 2emissionsthatthepolicyis
supposedtobringaboutwouldhaveanydiscernableeffectontheclimateorwouldpreventharm
toanyone.Indeed,thebestestimatesoftheeffectoftheKyotoProtocolarethatitmightlower
temperaturesbylessthanonehalfofonedegreeFahrenheitwhenfullyimplemented.12
Whilethisisnottheforumforacompletediscussionofthescientificissuessurrounding
globalwarming,thereareseveralpointsrelatingtothePPPthatneedtobehighlighted.First,the
scientificevidencerelatingtowhetherglobalwarmingisorwillbeoccurringiscontroversialand
farfromsettled.13Second,evenifwarmingdoesoccur,scientistsdisagreeastowhetheritwill
cause harm; many scientists claim that both increased atmospheric CO 2 and warming may
generatenetbenefitstosociety.14

Therefore,itisscientificallyrecklesstorefertoCO 2 asapollutantortothosewhose
activitiesemitCO2electricutilities,automobiledrivers,etc.aspolluters.Furthermore,ifit
cannotbedemonstratedthatincreasedlevelsofCO 2willcauseanyoneharm,thenwhatwould
theindustriesthatemitCO2bepayingfor?Ifitcannotbedemonstratedthatthereisapolluter,
thentheentireprincipleof"makingthepolluterpay"isvoidofmeaning.
InthecaseofCO2,thedefinitionofpollutionandwhoisthereforeapolluterhasbeenthe

resultofapoliticalprocessthathastakenplaceattheUnitedNations.Itisnottheresultofeither
rigorousscienceormeaningfulprinciplesofeconomicsorjustice.Ifpeoplebetter

11

Ibid.,p.206.

12

ThomasWigley,"TheKyotoProtocol:CO2,CH4,andClimateImplications,"GeographicalResearchLetter,

Vol.25,1998,ascitedinPatrickJ.Michaels,"LongHotYear:LatestScienceDebunksGlobalWarmingHysteria,"
PolicyAnalystsNo.329(Washington,D.C.:CATOInstitute,December31,1998).

13

Forevidencesuggestingthattherehasbeennoglobalwarmingforatleastthelasttwodecades,seeJohnR.

ChristyandRoySpence,"GlobalWarming:EvidenceFromtheSatelliteRecord,"EnvironmentalStudiesProgram,
CompetitiveEnterpriseInstitute,Washington,D.C.,fromwww.cei.org.

14

Foradiscussionoftheformer,seeElizabethCullota,"WillPlantsProfitFromCO 2?"Science,Vol.268,May,

1995andforadiscussionofthelatter,seeThomasGaleMoore,ClimateofFear:WhyWeShouldntWorryAbout
GlobalWarming(Washington,D.C.:TheCatoInstitute),1998.

understoodtherealmeaningofthePPP,ifactualvictimshadtobeidentifiedbeforeinvokingthe
PPPandimplementingaprogrambasedonit,iftheamountstobepaidhadtobebasedonthe
notionofcompensationforharmdoneorevenriskposed,thenthepoliticizationoftheprocess
wouldbemuchmoredifficult.Soundscienceandeconomicswouldhavetobeatouchstonefor
theentireprocess.
3.Superfund:TheGranddaddyofPPPPolicies
In1980CongresspassedTheComprehensiveEnvironmentalResponse,Compensation,and
LiabilityAct (CERCLA)andfromthisActestablishedtheHazardousSubstanceTrustFund,now
knownasSuperfund.TheseprogramsaremeanttocleanupEPAdesignatedhazardouswastesites.
TheprincipleofmakingthepolluterpayisexplicitlyincorporatedinthetitleoftheAct.

Ashasbeendiscussed,thePPPshouldbeaboutdetermining"liability"forharmand
makingthoseresponsiblecompensatethosewhohavesuffered.However,justliketheother
policyinitiativesdiscussedabove,Superfundhaslittletodowiththesebasicprinciplesdespite
thetitleoftheActthatcreatedit.SuperfundforcesthosewhohavebeendeterminedbytheEPA
tobe"polluters"topaytocleanupsitesthatmayormaynotbecausinganyoneharm.Many
victimsoftheseSuperfundrulingshavehadonlyatangentialrelationshiptothewastesite.The
programmakesnoefforttoidentifyorindemnifyharmedindividuals.
Manysitesthatposelittleornoactualrisktothesurroundingcommunitiesaredesignated
ashazardousundertheprogram.SitesareevaluatedbytheEPAaccordingtoaformulathatwas
originallysetuptoguaranteethatatleast400siteswouldbeidentifiedforcleanup.(CERCLAs
originalpurposewastoidentify400sitesnationwidewithaminimumnumberineachstateto
musterthepoliticalsupporttoensurepassage.)Theselectioncutoffpoint(asgeneratedbythe
formula)hasnothingtodowithidentifyingactualharmtoindividuals.Accordingtooneexpert,
"thereisnocorrelationbetweenasitebeingonSuperfundsNationalPriorityListandtheriskit
posestohumanhealth."15

Throughthelegalprocedureknownas"jointandseveralliability,"companiesandparties
thathavehadonlyatangentialrelationshiptothesiteandnomeaningfullycausalrelationshipto
anyhealthhazardsbeinggeneratedbythewastecanbeheldresponsibleforthefullcostof
cleanup.Furthermore,completelyunconnectedpartieshavebeenforced,atvarioustimes,topay
forfederalcleanupcoststhroughtaxesonspecificindustriesandacorporateminimumtax.
TheprimaryfocusofSuperfundisonforcingcompaniestobearthecostsof"cleaning
up"designatedhazardouswastedisposalsites,notoncompensatinganyvictimsthatmayhave
sufferedfromirresponsiblewastedisposalactivities.Amountsthatthe"polluters"paygoto

15

AsquotedinJerryTaylor,"SaltingtheEarth:TheCaseforRepealingSuperfund," Regulation:TheCato

ReviewofBusinessandGovernment,November15,1996,foundatwww.cato.org/pubs/regulation/reg18n2d.html.

lawyers,bureaucraticadministration,privateinvestigators,andcleanup,whileactualvictims,if
any,usuallygouncompensated.
A company or individual can be identified as a polluter even though there are no
spillovereffectsfromtheactivity;eventhough,inthejargonofeconomics,allcostsarebeing
internalized.Thisallowsthegovernmenttolabelas"polluters,"forlegalpurposes,companies
andindividualswhosewastedisposalactivitieshavebeenconfinedtotheirownpropertyand
havenotharmedothers.Thishighlightsthecrucialproblemswiththepolluterpaysprincipleasit
hasbeeninvokedoverthepastseveraldecades.Severingthelinkbetweenthepolluterandactual
harmed victims makes the standard completely arbitrary, and the principle can become a
powerfulweaponforanycrusadinginterestswhocangaincontroloftheregulatoryapparatus.
Furthermore,itdebasestheconceptofpollution.Pollutionsimplybecomesamatterofpersonal
aesthetics.Pollutionmaybedefinedasanyuseofaresourcethatisfoundtobedistastefultoa
particularbureaucracyorenvironmentalgroup,whichthencanbeusedasanexcuseforsome
formofgovernmentcontroloverhowtheresourceisused.
III.PropertyRightsandMakingthePolluterPay
Asnotedattheoutset,theideathatpollutersshouldbemadetopayforthedamagethat
theycausehasabasicappealtooursenseofjusticeandfairplay.Itisasimpleextensionofthe
ideathatpeopleshouldbeheldaccountablefortheiractions,andifonepersondoesharmto
another, then compensation is in order. What makes these fundamental principles of justice
coherent are property rights. When it is said that person A does harm to person B, it is
understoodthatAhasdonedamagetoBspersonorproperty,andtheamountthatApaysin
compensationtoBisrelatedtothemonetaryvalueofthisdamage.TheultimatepointisforAto
makeBwholeagain;thatis,totheextentpossible,AshouldprovidefullrestitutionforBs
suffering.
Itisrightthatenvironmentalpolicyshouldmakethepolluterpaysolongasitisgroundedin
thesebasicprinciples.Noonehastherighttoharmthepersonorpropertyofothersoreventomake

useofotherpeoplespropertywithouttheirpermission.Inthatcontext,ambiguitiesaboutwhatkinds
ofemissionsorbyproductsofproductionprocessesshouldbecharacterizedaspollution,whoshould
beidentifiedasapolluter,andwhatthepollutershouldpayandtowhomaregreatlyreduced.Ifa
produceremitsasubstanceintotheair,abodyofwater,orintotheground,andtheemissionscause
healthproblemstopeopleinthecommunityordamagetotheirproperty,thenthoseemissionswould
be correctly characterized as pollution and the company as a polluter. The payments that the
companywouldbeforcedtomakewouldgo,not

tothegovernmentintheformofataxortoothercompaniestosomehowbuypermissionto
pollute,buttothoseinthecommunitywhohavesufferedfromthepollutingactivities.16
This straightforward "polluter pays principle," which is based on the common sense
notionthatweshouldallrespectotherpeoplespersonsandproperty,givesrisetoauniqueway
ofviewingenvironmentalproblemsandhowtheyarise.Fromthisperspective,suchproblems
aretheresultofconflictsovertheuseofpropertyorsomeresource.PersonsAandBwouldboth
liketousethesameresourceorotherpropertyforconflictingpurposes.Usuallythepresenceof
private property allows for such conflicts to be resolved both peacefully and in a mutually
beneficialway,evenwhentheissueinvolvestheenvironment.
Forexample,onwildlifepreservesownedbytheAudubonSociety,itisnotuncommon
toseeenergycompaniesdrillingforoilandnaturalgas.WhiletheAudubonSocietyandoil
companiesmaywanttousethislandforwhatmightatfirstappeartobeconflictingpurposes,
whenprivateownershipofthepropertyisinplace,thereisastrongincentivefortheownersand
otherpartiestoreachanaccommodation.Byleasingpartofitslandforoilexploration,the
AudubonSocietycangainrevenuesforpurchasingotherlandwhileinsuringthatthedrilling
takesplaceinanenvironmentallyfriendlyway.Thisisnotthecaseonpubliclyownedland,such
asTheAlaskanNationalWildlifeReserve(ANWR),whereanydrillingisviewedasbeingatthe
expenseofenvironmentalconcerns.
Whensuchconflictsarenotresolvedthroughmutuallyadvantageousexchange,thatis,in
casesinwhichsomeonetriestomakeuseofanotherspropertywithouttheirpermission,the
problemisresolvedbyapplyingthesimplerulethatthepersonwhoowns(hastitleto)the
propertyistheonewhosepurposesprevail.Ifacompanyemitsdustorsootintotheairandthese
emissionssoilpeopleshomesorautomobiles,thereisaconflictovertheuseofproperty.The
companyisusingthepropertyofothersinthecommunityasadisposalsiteforitswaste.The
homeownersandthecompanywanttousethesehousesforconflictingpurposes.Thecompanys
emissionsrepresentpollution,notsimplybecausetheyareabyproductofa

16

Someeconomistsarguethatitisnotnecessaryactuallytopaythevictimsinordertoachieve"theefficient

level"ofpollution.Itisbeyondthescopeofthispaperfullytoassessthisapproach.However,itisoffensivetoany
senseofjusticebasedonindividuallibertyandpersonalresponsibility.Also,ithasserioustheoreticalproblemsthat
makeitpracticallyandconceptuallyimpossibletoapplyintherealworld.Economistswouldhavetobeableto
determinepeoplespreferencesintheabsenceofanyactionsbeingtaken,exchangesbeingmade,ortheexistenceof
actual market pricestoindicatean"efficient level" ofpollution.Policymakerswouldrequirethesamesort of
informationneededtocentrallyplantheeconomy.ItwouldrequiretheanalysttoassumewhatF.A.Hayekcalleda
"pretence of knowledge" (see Hayeks Nobel Prize address "The Pretence of Knowledge," in New Studies in
Philosophy, Politics, Economics and the History of Ideas, (Chicago: University of Chicago Press) 1985.) The
purposeoftheapproachinthispaperisnottocalculateandimposesomeefficientoutcomeonmarkets.Rather,the
purposeofthePPPistosecurepropertyrights,whicharenecessaryforefficientoperationofamarketexchange
process.ForadiscussionsofrelatedissuesseeJamesBuchanan,CostandChoice,(Chicago:MarkhamPress)1989;
RoyE.Cordato, WelfareEconomicsandExternalitiesinanOpenEndedUniverse,(Boston:KluwerAcademic
Publishers)1992;andMarioRizzo,"TheMirageofEfficiency,"TheHofstraLawReview,Vol8,No.3,1980.

10

productionprocessthatisemittedintotheair,butbecausetheemissionsviolatetheproperty
rightsofothers.
Thispropertyrightsapproachtakesthefocusoffthephysicalenvironmentperseand
placesitonhumanbeingsandtheirrighttolivetheirlivesunmolested.Anactivitycanonlybe
characterized as polluting if it harms others. In this context, the notions of costs to the
environmentordamagetotheenvironmentpersehavenomeaning.Alsofromthisperspective,
thethreequestionsmentionedattheoutsetofthispaperarereadilyandcoherentlyanswered.
Pollutionwouldbedefinedasanybyproductofaproductionorconsumptionprocessthatharms
orotherwiseviolatesthepropertyrightsofothers.Thepolluterwouldbetheperson,company,or
otherorganizationwhoseactivitiesaregeneratingthatbyproduct.Andfinally,paymentshould
bemadetothepersonorpersonsbeingharmed.
A.JusticeandEconomicEfficiency
Thepropertyrightsapproachtothepolluterpaysprinciplehastwodistinctandmutually
reenforcingadvantages.First,itisconsistentwiththeprinciplesoflibertyandjusticethatthe
United States was foundeduponand second, ifgenerallyinvokedas aguiding principleof
environmentalpolicy,itwillenhanceeconomicefficiencyandsocialwelfare.
Onthefirstissue,theargumentisstraightforward.ApropertyrightsgroundedPPPisbased
onthefundamentalideathatpeoplearefreetopursuewhateverproductionorconsumptiongoals
theydesiresolongasthereispersonalaccountabilityforanyandalldamagetoothersortheir
property.Individuallibertyandpersonalaccountabilityhavealwaysbeenthefoundationofourcivil
andcriminaljusticesystemsandformtheethicalfoundationofoursocialorder.

Justasimportantly,theefficiencyofaneconomicsystemdependsontheextenttowhich
private property rights are clearly defined and enforced. In the economics literature it has
becomestandardtoviewenvironmentalproblems,orwhateconomistscallnegativeexternality
problems,asresultingfrompoorlydefinedorenforcedpropertyrights. 17Whenpropertyrights

arenotprotected,producersorconsumersarefreetoimposecostsonothers,resultinginan
economically inefficient outcome. In an economically efficient world, people involved in
economicactivity,fromgeneratingelectricitytodisposingofwastematerials,wouldbearallof
thecostsoftheirproductionactivities.Thisinsuresthattherelevantinformationconcerning
resourcescarcityandconsumerdemandisbeingcapturedinthepriceofproductsbeingsoldon
themarket.Resourceswillbeallocatedmostefficiently,i.e.,inawaythatisconsistentwiththe
desiresofconsumersandtherelativeavailabilityofproductiveinputs,whenthedecisionsof
entrepreneursandconsumersarebasedonthesemorefullyinformedprices.

17

SeeRonaldCoase,"TheProblemofSocialCost,"TheJournalofLawandEconomics,Vol.3(October1960),

pp.144.

11

ApublicpolicystancethatisguidedbyapropertyrightsbasedPPPwouldholdthat
businessescanpursueproductionactivitiestheydesireusinganytechniquesorinputsthatthey
deemmosteconomicalsolongasthecostsoftheiractivitiesarenotbeingthrustuponothers
throughinvasionsofotherpeoplesprivateproperty.Ifthirdpartiesarebeingharmedbythese
activities,thentheoffendingpartiesareforcedtomakereparations.Themostlikelyforumfor
resolvingrelateddisputesisthecivilcourtsystem,wheresuchproblemsaretreatedasnuisances
ortorts.
Fromaneconomicstandpoint,suchanapproachwouldhavetwoimportantadvantages.
Firstandmostobviously,itwouldholdpolluterstoaccountforanyactionstheyhavetakenand,
ultimately,internalizethecostsoftheirproductionactivities,withpositiveeffectsontheprice
systemandtheefficientallocationofresources.Second,suchasystemwouldprovidestrong
incentivesforpreventionofpollution.Ifthoseinvolvedinproductionactivitiescometorealize
that they will be held strictly accountable forany harm that comes to others as aresult of
pollutingactivities,attemptswillbemadetoamelioratetheproblemsbeforetheyoccur.There
wouldbeastrongincentivetodevelopnewtechnologiesthataremeanttoeliminateorminimize
pollutionfromtheoutset,leadingtooverallreductionsinpollutiongenerally.
This approach would also shift the focus of policy makers and legislators from the
ineffable task of minimizing "costs to the environment" toward the more concrete goal of
minimizing conflicts over the use of resources and harm to individuals. Property rights
enforcementwouldprimarilybehandledbythecourts.Environmentalpolicywouldbedevoted
tomoreclearlydefiningpropertyrightswheretheyarecurrentlypoorlydefined(e.g,intheuse
ofrivers,streams,theoceans,etc.),becauseinordertoimplementaPPPonemustbeableto
determinewhohastherightstousetheresourceinquestion.Forexample,problemsofwater
pollutiongenerallyarisewherethequestionsofwhohasrightstousethewaterwayandforwhat
purposeshavenotbeenadequatelyaddressed.18
Inadditiontofosteringconflictsovertheuseofresources,thelackofpropertyrightsalso
encourages poor stewardship of resources, giving rise to the mismanagement known as the

"tragedyofthecommons."19Whenaresourceisnotownedoris"ownedincommon,"usersof
theresourcehavenoincentivetohusbanditjudiciouslyortoconserveorreplenishtheresource
forfutureuse.Thisisbecausethebenefitsassociatedwithsuchconservationmethodswillnotbe
reapedbythosewhobearthecosts.

18

Foranexcellentdiscussionofhow,inmanyinstances,propertyrightstosuchresourceshavebeenestablished

andhowtheycouldbepracticallyestablishedinotherinstances,seeTerryAndersonandDonaldLeal, FreeMarket
Environmentalism,(SanFrancisco:PacificResearchInstitute)1991.

19

GarrettHardin,"TheTragedyoftheCommons,"Science,Vol.162,pp.124348.

12

Ifafishermancomesacrossalargeschooloffishintheocean,hisincentiveistocatchas
manyofthemasquicklyaspossible.Anyattempttoconserveorreplenishthesupplywouldbe
futilebecauseotherscouldcomealongandextractasmanyfishastheywant,thwartingthe
fishermansconservationefforts.
Theincentivesareexactlytheoppositefortheownerofaprivatecommercialcatfish
pond.Everyfishextractedandsoldtodayisonethatcannotbesoldtomorrow,andtheowner
feelstheeffect.Hewillextractthecatfishjudiciouslyandreplenishthestockasitisdepleted.He
alsohasastrongincentivetokeepthewatercleanandtomakethepondaconducivehabitatfor
thecatfish.
The lesson is clear. A polluter pays principle that is based on private ownership of
resources will not only minimize polluting activities, it will instill the strongest possible
conservationethicconsistentwithprovidingthegoodsandservicesthatsocietydesires.
B.RevisitingSomeExamples
Pollutionproblemsarebestdefinedintermsofinterpersonalconflictsovertheuseof
property.Ifpropertyownersareusingonlytheirownresourceswithoutharmingothers,thereis
nocauseforgovernmentaction.Forexample,intheareaofsolidwastedisposalandrecycling,if
theflowofwastefromtheuseroftheproducttodisposalandstorageofanywaste
packaging,emptybottles,cans,etc.isproperlymanagedandkeptfromspillingoveronto
thepropertyofothers,thereshouldbenoconcerntopublicpolicymakers.
Theuseoflandfillsorincinerationasmethodsfordisposalwouldonlybepollutingifthe
byproductsofthesemethodswerenotcontainedandcauseddamagetoothers.Iftherewere
leakages from landfills into ground water supplies of a neighboring community or if the
incinerationprocesscausedemissionsintotheairthatcausedhealthproblemsforothers,thenthe
PPPwoulddictatethattheownersofthelandfills,includinganygovernmentownerssuchas

municipalities,shouldbeheldliableforthedamages.
It should also be noted that the same would be true for any of the waste that was
ultimatelyrecycled.Iftherecyclingprocessgeneratesbyproductsthatharmothers,thenthose
thatareinvolvedintheharmfulprocessshouldbeheldaccountabletothosewhoaredamaged.
Thesebyproductsmightincludechemicalwasteasaresultofstrippingtheinkfromnewsprint
orairpollutionfromtrucksusedincurbsidepickupoperations.
Aninterestingcaseinwhichtheseprincipleswerenotfollowedisthatoftheinfamous
LoveCanaldisposalsite.ProblemsatLoveCanalledtothepassageoftheSuperfundlegislation
inthe1970s.ThesitewasoriginallyownedbyHookerChemicalCompanyinthe1940sand
1950s.WhileHookerownedthesite,thecompanywasveryawareofitsresponsibilityto

13

containthechemicalsdepositedthere,andtookextensivemeasurestopreventanyseepageonto
neighboringproperties.
When the local school board wanted to buy the site, Hooker refused to sell on the
groundsthattherewastoxicwastestoredatthesite,andthattobuildaschooltherewouldbe
inappropriate.ThelocalschoolboardwouldnottakenoforananswerandforcedHookertosell,
threateningtotakethepropertyundereminentdomain.Hookerultimatelysoldthepropertyto
theschoolboardfor$1.00makingsuretostateupfrontinthecontractthatthesitecontained
toxicchemicalsandtodisclaimanyresponsibilityfordamagescausedbyfutureirresponsible
useoftheproperty.Hookerwarnedtheschoolboardnottodisturbthewallsandcapofthe
containmentfield.20
Unfortunately,duringtheconstructionoftheschool,theprotectiveclaywallsandcap
thatencasedthesitewereregradedandweakened.Then,overtheprotestsofHooker,theschool
boardsoldsomeofthelandforahousingdevelopment.Intheprocessoflayingthesewerlines
andbuildingthehomes,thestoredchemicalsleaked.Insteadofholdingresponsibletheschool
boardandthecityofNiagaraFalls,N.Y.(whichwaslayingthesewerlines),thegovernment,the
pressandthepublicblamedHookerChemicalfortheproblems.Underapropertyrightsbased
PPP,thepolluterwouldnothavebeenHookerChemical.Themerestorageofthewasteatthe
sitedidnotconstitutepollution.Thepolluterswerethosewhoallowedthewastetoseepontothe
propertyofothers,inthiscasethelocalschoolboardandthecity.Totheextentthattherewas
damagetothehealthandpropertyofothers,itwastheseinstitutions thatshouldhavebeen
forcedtomakecompensationandrestoredamagedproperty.
Finally,itneedstobereiteratedthatwherethereisnodamagetothepersonorproperty
ofothersandnoconflictoverresourceusage,thereisnopollution.Thisistheessentialpoint
missedbythosewhoarguethatapolluterpaysprincipleshoulddictateusingtaxesandother
penaltiestoreduceCO2emissions.Indeed,therearethreegoodreasonsfornotbrandingCO 2as
apollutant.

First, the global warming hypothesis that the increased levels of CO 2 due to human
activitywillcausesignificantincreasesinglobaltemperatureshasnotbeenproven.Second,even
ifitwereproventhathumangeneratedCO2 willcausehigherglobaltemperatures,ithasnot
beenproventheresultswouldbeharmful.Somescientistshavearguedthatwarmertemperatures
might have positive social benefits, including those that might result from longer growing
seasonsandreducedhealthproblemsrelatedtoharshwinters.Third,CO 2isessentialforalllife
onearth.Temperatureissuesaside,anincreaseinCO2mayboostplantgrowthand

20

Taylor,op.cit.

14

cropyieldsbyactingasan"aerialfertilizer,"asithasbeenreferredtobythejournalScience21.
Consequently,itmakesnosensetoidentifythoseindustries andconsumerswhoseactivities
generateCO2 aspolluterswhoseactivitiesmustbestoppedorwhomustbemadetopayfor
damages,becauseithasnotbeenestablishedthattheiractivitieshavecausedharm.
Conclusion
Theideathatpollutersshouldbemadetopayfordamagesthattheycausetothehealth
andpropertyofothersissoundand,inafreesocietybasedonpersonalresponsibility,shouldbe
theguidingprincipleforallenvironmentalpolicy.Astraightforwardinterpretationofthepolluter
paysprinciplewouldsuggestthatiftheconsumptionorproductionactivitiesofonegroupof
consumersorproducershaveharmfuleffectsonothersthentheperpetratorsoftheharmsshould
beheldliableforthedamages.
This interpretation leads directly to a defense of private property. As noted,
environmentalproblemsoccurbecausethereisaconflictovertheuseofaresource.Inorderto
decidewhoisthepolluterandwhoshouldbepaid,onemustfirstknowwhohasrightstothe
resourcewhoseuseisindispute.Theentireconceptofdamageorharmistiedintothisprinciple.
Whenwethinkofdamagetopropertywearenotsimplyspeakingaboutthealterationofoneor
anotherofitsphysicalaspects,weareinfacttyingthatpropertytoanownerandtheusesthathe
orshemayhaveplannedforit.Thedamageinquestionisnotthe"harm"tothephysicalproperty
butrathertheharmtotheowner.
Certainly, there are situations where ownership is in dispute or property rights are
undefined.Theseproblemsneedtobeclarified,eitherinthecourts,asistypicallythecasewhen
thereareinterpersonaldisputesoverpropertyrights,orlegislatively,asmaybenecessarywhen
rightsarecompletelyundefined,asmightbethecasewithrivers,theocean,etc.22
Unfortunately,thepolluterpaysprinciplethatiscurrentlyguidingpublicpolicyseemsto
havebeendefinedpurelybythewhimsofpolicymakersandadvocacygroups.Theideathat

environmentalproblemsareessentiallyaboutinterpersonalconflictsovertheuseofpropertyhas
beentakencompletelyoutoftheequation.Thenotionofpropertyrights,wherewhatisbeing

21

SeeCullota,op.cit.atnote14.AlsoseeGrahamD.Farquhar,"CarbonDioxideandVegetation,"Science,Vol.

278,November21,1997.

22

It should be noted that, historically, private property rights arrangements have developed with regards to

portionsofbothriversandtheocean,whichhavetypicallyworkedverywelltostemtheproblemsassociatedwith
the "tragedy of the commons" discussed above. These arrangements have arisen, very often, through private
agreementsamongusersoftheresource.Unfortunately,inmanycaseslocalandfederalgovernmentshaverefused
toupholdtheseagreements.Foranexcellentdiscussion,seeAndersonandLeal,op.cit.atnote18.

15

The Emergency of 1975-77


referredtoaretherightsthathumanbeingshavetoproperty,hasbeenreplacedwiththeideathat
somehowthepropertyitselfhasrightsthatarebeingviolatedbyproductivehumanactivity.
From this distortion of the notion of property rights we end up with the illogical
definitionofapolluterassomeonewhocausesdamageto,orimposescostson,notothers,but
the environment. Since the environment cannot be compensated directly, this makes for an
excusetoimposetaxesontheoffendingpartieswiththepromise,ofcourse,thattheywillbe
usedto"undothedamage."
Inreality,such"polluterpayments"serveprimarilytoenhancetheincomesofahostof
governmentbureaucrats,consultants,andlawyers,allofwhombenefitfromtheprocess.The
polluterpaysprincipleascurrentlyconstruedendsupasadevicetotransferwealthfromnon
polluterstopoliticallywellconnectednonvictims.
Acorrectlyconstruedpolluterpaysprinciplewouldhighlightthefactthatthereisno
tensionbetweenliberty,economicefficiency,andprivatepropertyontheonehandandsound
environmentalstewardshipontheother.Environmentalproblemstendtoarisewhenpeopleare
allowedtoimposecostsonothersbydegradingotherpeoplespropertyorbyusingpropertythat
isunowned.Apropertyrightsbasedpolluterpaysprinciple,ifimplemented,wouldsolvemany
oftheseproblems.Itwouldensurethatexistingpropertyrightsareenforced.Itwouldprovide
principled guidance for the privatization of currently unowned resources by courts and
legislatures.Finally,byclearlyidentifyingtheobjective,itwouldmakeitmucheasierforlaw
makersandadjudicatorsofdisputestomoveintherightdirection.

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