How to Make Environmental Targets Affordable in Estuarine Waters: Extending the Polluter Pays Principle?

Mateo Cordier, Walter Hecq, Rima Hawi and José Pérez Agúndez

No 14-001, Working Papers CEB from ULB -- Universite Libre de Bruxelles

Abstract: In European environmental water legislation, costs are deemed disproportionate when the total cost of a supplementary environmental measure appreciably exceeds the total benefit generated by the measure (cost-benefit concept). Moreover when costs are lower than benefits, they are deemed disproportionate if polluters cannot afford them (affordability concept). The implication of both disproportionality concepts for ecosystem protection is important given that they condition the possibility for environmental targets to be postponed or made less stringent. But what if this twofold concept of disproportionate cost were replaced by the affordability concept alone? A first argument supporting our suggestion is that cost-benefit analysis encounters difficulties in taking into account the important ecological functions provided by biological structures and processes from which ecosystem services stem. A second argument is that there is no reason for not implementing an environmental legislation democratically decided by representatives if polluters can bear the costs. The problem is that the affordability concept strongly depends on the range of the “Polluter Pays Principle” considered. In order to improve environmental equity and reduce the number of cases where environmental targets are postponed or made less stringent, we develop two extensions of the “Polluter Pays Principle”. The extension method is based on an ecological-economic input-output model and tested on the case of natural marine habitat destroyed by harbour extension in the Seine estuary. The results suggest that disproportionate costs can be transformed into affordable ones when the “Polluter Pays Principle” is extended to economic sectors with indirect responsibilities of second order (“User Pays Principle”) and third order (“User of User Pays Principle”). To ensure that such extension is fair to the ecosystem and to economic sectors, equity issues are considered. Our results suggest that if the method developed in this paper were applied, economic feasibility would no longer be an argument to impede the implementation of policies with ambitious environmental targets offering significant improvements to ecosystem quality.

Keywords: polluter pays principle; ecological-economic model; water legislation; disproportionate cost; cost-benefit analysis; equity (search for similar items in EconPapers)
Pages: 19 p.
Date: 2014-01-06
New Economics Papers: this item is included in nep-agr, nep-env and nep-res
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