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2.4 Comparing environmental policies and legislations

Environmental degradation affects national welfare by damaging human health, economic activities and ecosystems. From an economist’s perspective, desirable regulation should weigh two factors: the benefits associated with reduced environmental damage, and the opportunity cost of mitigation. In reality, the extent and focus of government intervention will also reflect national political and institutional considerations.

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It is therefore in this context that evolving a sound environmental policy is a condition precedent to having a sustainable environmental management. Policy is concerned with identifying problems, setting out aims and objectives and designing strategies and action plans. Law acts as one of the vehicles to achieve the aims and objectives set by policy. The success of any environmental policy depends on changes in the behavior of producers and consumers. Environmental policy can try to bring about these changes by means of various instruments. We do not have any generally accepted, standardized and unequivocal classification of environmental policy instruments. However, there is some agreement that three broad categories of instruments can be distinguished.

Instruments aimed at voluntary adaptations of individual and group behavior in a more environmental friendly direction. This category, called communicative instruments includes the provision of knowledge and information in all possible forms, moral suasion and voluntary commitments by trade and industry or agreements between them.

Instruments, which affect the market condition under which people and firms make their decisions. This category is commonly referred to as economic instruments. This includes charges and taxes, subsidies and other types of financial support (such as tax reductions), tradable rights (to emit a certain amount of pollutants, or to produce or use a certain amount of polluting goods or substances), deposit -refund systems, in which a deposit for a potential polluting product is being paid by the purchaser, who can claim a refund after returning the product showing that the pollution did not take place and liability legislation requiring the polluter to compensate the environmental damage he caused , and thus providing a financial incentive for pollution prevention.

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Instruments, which influence the range of alternatives by means of prohibitions, restrictions or obligations. This category is often called direct regulation or ‘command and control’ (CAC) regulation. This can be done by introducing product, process or emission standards. Outright bans on certain activities, products or substances also belong to this category. The emphasis of environmental policy should be to mitigate environmental hazards without compromising development. National environmental policy instruments should also meet the internationally recognized basic principles such as ‘ the polluters pays’, ‘prevention is better than cure’, the ‘precautionary principle’, etc.

2.4.1 Criteria for evaluating environmental policies

A centralized environmental policy requires that some central administrative agency will determine what is to be done and in what manner. A decentralized policy is executed by many individual decision makers, each of whom makes her own assessment of the situation. In this context, the specific criteria for evaluating environmental policies are efficiency, fairness, incentive for improvement and enforceability. [14]

For a policy to be efficient, it must be cost effective. A policy is cost effective if it produces the maximum environmental improvement possible for the resources being expended. For a policy to be socially efficient, it must also balance costs with benefits. This is important in the context of less developed economies where people have fewer resources to put in environmental programs and can ill afford policies that are not cost effective and efficient.

Fairness, or equity, is another important criterion for evaluating environmental policy. Environmental problems can be approached by different environmental policies. But the impact of each policy will be different on society in terms of the income groups, ethnic and racial groups. Equity is thus a matter of morality and the regard that relatively well off people have for the underprivileged. Equity considerations become very important in designing an international environmental policy. Because less developed countries feel that economic consequences of a particular policy should be borne by developed countries as they have contributed more towards increasing environmental hazards and problems.

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A critically important criterion to evaluate any environmental policy is whether the policy provided a strong incentive for individuals and groups to find new and innovative ways of reducing their impacts on the environment. The greater the incentive, the better would be policy in its application.

The objective of enforcement is to get people to comply with an applicable law. There are two main components of enforcement, which are monitoring and sanctioning. Polluters, who stand to lose money, may try to frustrate monitoring of the applicable laws. And the more sophisticated and complicated the process of applicable law, the easier it is for polluters to find ways of evading it. The other component of enforcement is sanctioning polluters who are in violation of law. This appears simple but it is not the case. Polluters may use their vast resources to see that the court cases become a long drawn affair so that no penalty is imposed immediately. This may also discourage the prosecuting agencies. So the sanctioning process can become much more complicated than the simple model of policy suggests.

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