POLLUTER PAYS PRINCIPLE

B.A. LL.B. (INTEGRATED LAW DEGREE COURSE)

ENVIRONMENTAL LAW (VI SEMESTER)

“PROJECT WORK”

“POLLUTER PAYS PRINCIPLE”

SUBMISSION TO: SUBMITTED BY:

MR. ZAIN SALEH RAJAT KAUSHIK

FACULTY OF ENVIRONMENTAL LAW 17RU11020

DESIGNATION: ASSISTANT PROFESSOR SESSION:-2017-2022

SEMESTER:-VI

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ACKNOWLEDGEMENT

I take this opportunity to express our humble gratitude and personal regards to MR ZAIN SALEH
for inspiring me and guiding me during the course of this project work and also for his
cooperation and guidance from time to time during the course of this project work on the topic
“POLLUTER PAYS PRINCIPLE”.

Date of Submission: 28-03-2020

Name of Student: RAJAT KAUSHIK

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TABLE OF CONTENTS
RESEARCH QUESTION........................................................................................................... 4
RESEARCH OBJECTIVE ......................................................................................................... 4
RESEARCH METHODOLOGY ................................................................................................. 4
HYPOTHESES..................................................................................................................... 4
SOURCES OF RESEARCH .................................................................................................... 4
SCOPE & LIMITATION OF RESEARCH................................................................................ 5
INTRODUCTION ..................................................................................................................... 6
EVOLUTION OF PPP IN INDIA & UK ..................................................................................... 7
POLLUTER PAYS PRINCIPLE & MARKED BASED INSTRUMENTS ........................................... 9
POLLUTER PAYS PRINCIPLE- INDIAN &UK PERSPECTIVE ................................................. 12
CONCLUSION & SUGGESTIONS ........................................................................................... 16

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RESEARCH QUESTION

The research broadly dwells on the following questions:

1. What constitutes “pollution”, “pollutant”, Polluter” & Damages under PPP?

2. How does PPP ensure that the polluter does not further pollute the environment even
after paying compensation?
3. What does PPP impose an absolute liability on the polluter both from economic and
legal standpoints?
4. How does PPP check Environmental pollution by protecting its resources through
active intervention by the government?

RESEARCH OBJECTIVE

The research has the following main objectives:

1. To thoroughly understand the concept of PPP in its fullest sense.

2. To explore the various intricacies of PPP in Environmental Law.
3. To critically analyse the hindrances and loopholes in its applicability and extension in
India and to other Jurisdictions like UK;
4. To suggest suitable alternative remedies for its better functioning and implementation.

RESEARCH METHODOLOGY

The research is doctrinal in nature and the methodology adopted is analytical, comparative and
descriptive which employs deductive logical reasoning to elaborate the finer details of PPP in
each judicial precedent under International Environmental Law.

HYPOTHESES

The following are the hypotheses of this research:

1. PPP imposes absolute liability on the polluter.

2. PPP cannot be implemented through strict legal standards.
3. Excessive application of PPP leads to distortions on Cost and Market analysis.

SOURCES OF RESEARCH

The research extensively relied on standard texts, articles, commentaries, digests, journals,
landmark judgement, e-journals and official website of the OECD amongst many others.

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SCOPE & LIMITATION OF RESEARCH

The research is only limited to understanding the concept of PPP and its loopholes in
applicability by critically comparing both the Indian and UK perspectives & international
conventions under Environmental Law.

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INTRODUCTION
The “Polluter Pays principle” [hereinafter PPP] states that the Polluter’, a person who pollutes
the environment; must pay for the harm and compensate the victim. The principle imposes
absolute liability as the polluter is not only liable to pay compensation to the victims but also
reinstate and restore the environmental to its original position. Ultimately, the burden lies on
the polluter to pay the costs and for its effects including remedial or cleanup costs and other
necessary expenses.

The PPP was first mentioned in the recommendation of the Organization for Economic Co-
operation and Development [hereinafter OECD] of 26th May, 1972 and reaffirmed in the
recommendation of 14th November, 19741 . it specified the main functions of PPP as “allocation
of costs of pollution prevention and control measures to encourage rational use of scarce
environmental resources and to avoid distortions in international trade and investment”. The
European Community took up the OECD recommendation in its first ‘Environmental Action
Program’ (1973-1976) regarding cost allocation and action by public authorities on
environmental matters. Since 1987, the PPP had been enshrined in the Treaty o the European
Communities. Although the principle of PPP was not in the future of 1972 Stockholm
Declaration2, is was finally laid down under Principle 16 of the Rio Declaration, 19923.

Thus, due to application of PPP may protect economic interests but excessive application of
PPP may again lead to distortions. The major weakness of PPP is that it cannot provide an
answer to the question of whether an impact is harmful or has to be considered as damage. It
still remains a challenge to natural and environmental sciences to define relevant criteria that
could be implemented by legal standards. Thus, PPP does not only apply if there is a “real”
pollution in terms of harm or damage to the environment.

1
Organization of economic co-operation & development, 1972; Retrieved from www.oecd.org-2015-05-30.
2
Principle 22, Stockholm declaration of the United Nations Conference on the Human Environment, 1972
Retrieved from http:/legal.un.org/avl/images/ha/dunce/08-1.jpg (last visited 22nd March at 21:37 IST).
3
Principle 16, Rio Declaration of the United Nations Conference on the Human Environment, 1992; UNCED
doc. A/CONF.151/5/Rev.1, 31 ILM 874 (1992).

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EVOLUTION OF PPP IN INDIA & UK

“The ‘Polluter Pays Principle’ states that whoever is responsible for damage to the
environment should bear the costs associated with it”4.

As a general rule, sound economic analysis of pollution and environmental problems must also
be based on the Principle of Responsibility5. Forcing pollution to hear the costs of their
activities is good economics too; it not only advances fairness and justice, but also enhances
economic efficiency. “Polluters” are not necessarily those who, through their production or
consumption activities, do damage to the persons or property of others. Polluters are those who
“damage” or impose “costs” on the Environment. In other words, a ‘polluter’ is someone who
is simply using his own property and resources in a way that is not approved of by government
officials or Environmentalists. In such cases, there is no harm to be measured and no real
victims to compensate.

Consequently, the amount to be paid is not determined by the extent of any actual damage
done. Rather, it is set at a level that curbs the politically disfavored activity to the degree desired
by its opponents. On the other hand, a ‘Pollutant’ is a substance or energy introduced into the
environment that has undesired effects, or adversely affects the usefulness of a resource. A
Pollutant may cause long-or short-term damage by changing the growth rate of plant or animal
species, or by interfering with human amenities, comfort, health, or property values. Some
pollutants are biodegradable and therefore will not persist in the environment in the long
term.in most of the cases, the PPP is used as cover to promote a political ideological agenda
rather than to ensure that real polluters pay compensation to real victims of their activities 6.

The PPP, originally an economic principle, was designed to correct improper cost allocation.
This improper cost allocation has resulted from the common belief that such air and water were
not scarce and, as a result, freely available. By not taking the cost of these resources into
account in the production or consumption of goods and services, an ‘externality’ arises. An
externality (or external costs) results when someone’s action causes an uncompensated loss of
welfare to others. This is generally referred to as a “Cost on Society”. Costs associated with

4
Taking Action, Chapter 2, p.03, Published by United Nations Environment programme[sic], retrieved from
www.rona.unep.org.action.02.hmt (last visited of 22nd March 22:45 IST).
5
Christopher Miller, Environment Rights: Critical Perspective, (1st Ed. Routledge Publications,
Oxfordshire,2015), p. 37.
6
Ibid, p. 38.

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pollution are considered to be “externalities”. 7 PPP is included in the United Nations’ 1992
Rio Declaration and Agenda 21 as part of a set broad principles t guide sustainable
development globally8. The polluter is liable to pay the cost to the individual sufferers as well
as the cost of reversing the damaged ecology9.

The PPP was first formulated in 1972 when the OECD promulgated the “Recommendation of
the Council on Guiding Principles Concerning International Economic Aspects of
Environmental Policies” (‘Guiding Principles’) 10 . in accordance with its mandate to further
International Trade, the OECD adopted the PPP as the recommended method for allocating
costs of production. No OECD member country formally ratified the guiding Principles or
Implementation Recommendations11. However, the ‘Declaration on Environment: Resource
for the Future’ was adopted by the governments of OECD member countries (which included
the UK)12.

While the 27 principles enshrined in the United Nations Rio Declaration on Environment and
Development is legally non-binding, they were endorsed by the 178 countries meeting there,
including India and the UK13. In UK law, “Pollution” is defined as the release of harmful or
potentially harmful substances into the land, water or air 14. Under Environmental Protection
Act, 1990 (EPA), it is the role of local authorities to identify ‘Contaminated Land’. Such land
is defined as being in a condition, caused by substances in, on or under the land, firstly so as to
cause, has the ‘significant possibility’ of causing significant harm or secondly, to cause, or
likely to cause, water pollution. ‘Harm’ is defined broadly to cover health, environmental
quality, sensory offences and damage to the property. “The Corporation Tax Act, 2009”
(hereinafter CTA, 2009), on the other hand, does not require that the harm be ‘significant’ or
that the possibility of harm be significant. The CTA, 2009 also makes it clear that the

7
Judith A. Layzer, The Environmental Case: Translating Values into Policy, (3rd Ed., CQ Press, Washington D.C.,
2016), p. 86-87.
8
Supra note 3.
9
Justice TS Doabia, Environmental & Pollution Laws in India, Vol 1, (2nd Ed., LexisNexis, Nagpur,2010), p. 174.
10
OECD, ‘Reconnendation of the Council on Guiding Principles concerning International Economic Aspects of
Environmental Policies’, (OECD Doc. C(72)128, 26 May 1972),
http://acts.oecd.org/instruments/ShowInstrumentView.aspx?InstrumentID=4&Lang=en&Book=False (last
visited on 22 March at 23:35 IST).
11
Noted in OECD, ‘Decision-Recommendation of the Council on the Co-operative Investigation and Risk
Reduction of Existing Chemicals’ (OECD doc C(90)163/Final, 31 January 1991)
http://actsoecd.org/Instruments/ShowInstrumentsView.aspx?InstrumentID=59&InstrumentPID=56&Lang=en
&Book=False (Last Visited on 23 March at 22:37 IST) .
12
Declaration on Environment: Resource for the Future; 20th June, 1985 C (85) 111.
13
Supra note 4, p. 126.
14
EPA, 1990; Sec. 1; r/w Sec. 1 of Pollution Prevention and Control Act, 1999.

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substances must be the only cause of the contamination. Thus, in the UK, the PPP is strictly
applied if contaminations in any form is established on the polluter under the relevant
provisions.

In India, the development of PPP was shrouded in uncertainty till the Enviro-Legal Action Case
(Indian Council for Enviro Legal Action vs Union Of India15) where the principle of absolute
liability was affirmed. The same principle was reinstalled in Oleum Gas Leak case16. The
principle of absolute liability and the concept of Sustainable Development for the first time
were invoked in Vellore Citizens Welfare Forum vs Union of India17. Thus, the use of PPP has
been justified via the Constitutional mandate, statutory provisions and Customary International
Law. Later on, with parallel developments in the international paradigm with respect to
Environmental Policies, the burden to protect the environment equally fell on the persons who
polluted it18. As a result, unlimited exploitation of nature resources came to an abrupt halt with
the subsequent introduction of Environmental Legislations to prevent the abuse of
Environment.

POLLUTER PAYS PRINCIPLE & MARKED BASED INSTRUMENTS

Market based or Economic based Instruments (both are policies of PPP) are broken down into
two categories, Taxes and Tradeable Permits which are seen as attempts to “make the polluter
pay” by attaching a free to the polluting activities 19. The tax would be paid either in the form
of an emission free or an excise tax on the sales of products that are associated with pollution.
The tradeable permits approach would first have the government established an overall
acceptable level of emission for an Industry and would then distribute permits for the level of
emission of the Companies within the Industry. The Companies could not then buy or sale
these emission permits based on their needs to emit the pollutant and their abilities to find
pollution abatement techniques. By these means, the polluters are made to “pay” for their
polluting activities either through a tax, through the purchase of permits from others in the
industry, or through use of their own assigned permits (foregoing the cash that could be earned

15
(1996) 3 SCC 212.
16
M.C. Mehta v. Union of India, (1987) 1 SCC 395.
17
(1996) 5 SCC 647.
18
P. Leelakrishnan, Environmental Law In India, (3rd Ed., LexisNexis, Nagpur, 2008), p. 138-139.
19
R. Rajagopalan, Environmental Studies; From Crisis to cure, (3rd Ed., Oxford University Press, New Delhi,
2016), p.204.

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by selling them) 20 . In the first instance, the “payment” is established by and made to
government. In the latter cases, it is established by the supply and demand conditions in the
market for permits.

While the presumed moral case for market based instruments is generally centered on the
concept of making the polluter pay, the economic jurisdiction for these instruments is that of
efficiency, i.e. using market based incentives to accomplish Environmental goals is assumed
to be more efficient than traditional command and control policies. As argued by the World
Resources Institute’s Duncan Austin, ‘Economic Instruments’, which aim to control pollution
by harnessing the power of market incentives offer a more cost effective, flexible, and dynamic
form of regulation than conventional measures 21. This notion is tied directly to the PPP.
Theoretically, by making polluters pay, the pollution costs associated with their production
activities are taken into account. This encourages the efficient use of resources overall, while
providing an incentive for polluters to find the lowest cost methods for reducing emissions.

The problem with this theoretical approach is that, in advocacy and practice, the concept of
cost is twisted to mean more than actual damage inflicted on third parties22. Too frequently,
the payment of that PPP advocates would impose r the degree of cutback that is mandated is
calculated to reduce the activity in question to the degree desired by the opponents of the
activity rather than to the extent warranted by the actual level of “external costs” associated
with the activity. Economics, being a behavioral social science, attaches the concept of costs
to human beings and individual decision making. “Cost” refer to what must be given up a
person chooses one course of action as opposed to another rather than another23. Economic
theory argues that efficiency, i.e., social welfare, will be maximized when producers take into
account all of the costs involved in making the product (including the costs they incur
themselves and they impose on other people) as they decide how much to produce and how
much to charge.

For Example, in the case of a Company that is polluting a river, the cost might be to downstream
recreational users who have to give up or cut back on certain activities: swimming, fishing, etc.
their cost would be the value that they place on the activities that the pollution is preventing
them from perusing. From this perspective, then, pollution “problems” arises because the

20
Brad Jessup & Kim Ruben Stein, Environmental Discourses in Public & International Law, (1st Ed., Cambridge
University Press, Cambridge, 2012), p.122.
21
Ibid, p.113
22
Supra note 6, p. 89.
23
Dharmendra S. Sengar, Environmental Law, (1st Ed., PHI Learning Pvt. Ltd. New Delhi, 2014), p.126.

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polluter is imposing costs on the other human beings. It is the human users of the river who
bear the costs, not the river itself24.

An economic notion of “damage” would be directly linked to this view of costs. All pollution
damages would relate to costs that are imposed on others, either by directly causing them
physical harm or by somehow deprived them the use of their property. Many advocates of
market based instruments and PPP misappropriate the economic theory by redefining the
concepts of cost and damage to apply to things than to people. Inanimate objects and the
Environment do not incur costs but people do25.

The development of PPP in urban areas mechanism to safeguard against its potentially harmful
effects while at the same time reduce uncertainties about its economic impact. Economists have
expressed reservations about the economic viability of PPP.

1. The application of PPP in urban areas where the Industrial Sector is Dominated by
medium, small and tiny enterprises operating in highly competitive market is risky as
any higher costs from emission or other effluent clean-up charge might adversely affect
their competitiveness in relation to large firms that are capable of affording the
installation of necessary equipment.
2. Even through PPP does not prohibit the polluter from passing on the additional costs
that he might incur in terms of increased costs, thereby increasing price of his product,
the reality in developing nations (India) may not always be this way. These nations
which rely heavily on exports of primary commodities for which demand in the
international market is elastic may find that the costs are entirely borne by the producers
in the form of damage to human health, property and ecosystem26.
3. Representing a larger objection to the inclusion PPP in Indian Law is the consequences
it will have in the realm of the common property resource. The application of the
principle will lead to the appropriation of rights by wealthy landlords to the
disadvantage of the small land owners, if curbs are imposed on the manner in which a
resource can be used, in this instance, land 27.

24
Ibid, p.128.
25
Dhandapari Alagiri & E Naveen Kumar, Environmental Issues in India: An Introduction, (1st Ed., ICFAI
University Press, Agartala, 2007), p.137.
26
Supra note 21, p.133.
27
Mahesh Rangarajan & K. Sivaramakrishnan, India’s Environmental History: From Ancient Times to the
Colonial Period, (1st Ed., Permanent Black Publishers, Ranikhet, 2014), p.225.

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4. The Court has not dealt with the fact that the level of charges to be imposed on the
polluter are extremely difficult to estimate and therefore will give rise to difficulties.

To offset the potential economic harm, PPP must be implemented via Market Based
Instruments. The main aim of this is to induce in Environmental management through the use
of market mechanisms 28. One of the suggested mechanisms to achieve the above mentioned
goal is an Environmental Assurance Bond. This is a bond that would provide a contractual
guarantee that the principal would perform is an environmentally benign manner, but would be
levied for the current best estimate of the largest potential future Environmental damages.
Funds in the bond would be invested and would produce interest that would be returned to the
principal. The bond would be held till the uncertainty or some part of it was removed 29. This
would provide a strong incentive for the principal to reduce the uncertainty of the Environment
impact of their activities as quickly as possible, by charging technology to being more
Environments friendly. The bonds could be administered by an independent regulatory
authority, similar to that of the pollution control board.

A potential argument such bonds is that it would favour relatively large firms that could afford
to handle the financial responsibilities of activities potentially hazardous to the Environment.
But this will prevent firms that cannot handle the financial imposition from passing on the cost
of the Environmental damage to the public. 30. this does not, however, exclude shall firms from
the ambit of this principle. It is desired that these firms bond together to handle financial
responsibility for Environmental damage. They may also feel it is more profitable to switch to
less risky activities or technology that does not require such high assurance bonds31.

POLLUTER PAYS PRINCIPLE- INDIAN &UK PERSPECTIVE

The European Charter on the Environment and Health, 198932and the Single European Act
198633 made provisions for applying the PPP . the United Nations Conference on Environment
and Development, 1992, in Principle16 incorporated the PPP. More recently, the member states

28
O. V. Nandimath, Handbook of Environmental Decision Making in India: An EIA Model, (1st Ed., Oxford
University Press, New Delhi, 2009), p.175.
29
Ibid, p.177.
30
S. Shantakumar, Introduction to Environmental Law, (2nd Ed., LexisNexis, Nagpur, 2005), p.137
31
Supra note 26, p.180.
32
The European Charter and Commentary, First European Conference on Environment and Health, Frankfurt,
7-8 December, 1989; WHO Regional Publications European Series No. 35; See also
www.euro.who.int/en/.../policy.../european-charter-on-environment-and-health-1989 (last visited on 25 March at
22:02 IST)
33
Single European Act, 17 Feb, 1986, 1987 OJ (L 169) 1.

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of the council of Europe and the European Economic Community adopted the ‘Convention on
Civil Liability for Damages Resulting from Activities Dangerous to the Environment’34 which
specially deals with transboundary pollution35. Every branch of International Law gives rise to
an obligation to make reparations. As civil liability is not connected to the breach of
administrative standards in most European legislations, consistency is more with traditional
legal concepts. Environmental Legislation provides for measures which are taken to minimize
risks- even in cases where is a lack of scientific knowledge and scientific cause-effect
relationship cannot be fully be established36. Although traditional norms of state responsibility
concern to treatment of aliens and their property, the ‘Trail Smelter Arbitration’ recognized
that the principle of state responsibility is applicable in a field of trans-frontier pollution and
consequently states may be held liable to private parties or other states for pollution that cause
demonstrable damage to Environment 37. The pertinent question is whether the mere presence
of PPP in a few instruments can have the effect of giving it the status of Customary
International Law?

In the Erika Oil Spill Case38, the European court of Justice held based on Article 15 of the EU
waste Framework Directive, 2006 that the producer of hydrocarbons which became waste due
to an accident at sea, could be held liable for the clean-up costs.39 In accordance with PPP,
however, such producer is not liable unless he or she has contributed through his or her conduct
to the risk of pollution stemming from the shipwreck. The question of whether the “user” could
also be regarded as a “polluter” becomes relevant as users often pay indirectly when pollution
control costs are internalized in the prices of the product. There is yet a unanimous opinion as
to whether PPP should be considered as a general principle of law or Customary International
Law under Article 38 of the Statue of the International court of Justice. 40

34
Convention on Civil Liability for damage Resulting from Activities Dangerous to the Environment; European
Treaty Series No. 150, Lugano, 21.VI.1993, ETS 150, Retrieved from
https://rm.coe.int/CoERMPublicCommonSearchServices/DisplayDCTMContent? (last Visited on 26 March at
04:04 IST)
35
Richard Moules, Environmental Judicial Review, (1st ED., Hart Publishers Ltd., Oxford, 2011), p. 141.
36
Shyam Divan & Armin Rosencranz, Environmental Law & Policy in India: Cases, Materials & Statues, (2nd
Ed., Oxford University Press, New Delhi, 2014), p. 210.
37
P. Leelakrishnan, Environmental Law Case Book, (2nd Ed., LexisNexis, Nagpur, 2006), p. 167.
38
M v Erika, (1999); The ERIKA Oil Spill: Environmental contamination and effects in the Bay of Biscay (2004),
Special Issue of Aquatic Living Resources, Vol. 17, No. 3, July-September 2004, EDP Sciences; See also The
Erica Oil Spill: The Bird Rescue Response, LeDrean-Quenec’hdu, S., Jacques, J-P., Lamy, A (2001),
Proceedings of International Oil Spill Conference 2001, American Petroleum Institute, Washington DC, USA.
39
Supra note 37, p. 171.
40
Article 38 if the International Court of Justice, Retrieved from www.icj-cij.org/documents/?p1=4&p2=2 (last
visited on 26 March at 18:16 IST)

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41
The International Court of Justice in the North Sea Continental Shelf Case delivered a
landmark judgement determining whether a particular provision in a treaty had acquired the
status of Customary International Law, thereby making it binding on those nations who are not
signatories to the treaty concerned. 42 According to the decision, state practice and opinion juris
can enable a treaty to acquire the status of Customary International Law. The former requires
that there be widespread acceptance by nations of new norm and the latter signifies that the
practice must have rendered obligation by the existence if the Rule of Law requiring it. The
fact 153 states were signatories of the Rio Declaration does not make PPP in the declaration
one of Customary International Law. What is required is a demonstrable willingness to adhere
to it and the practice of nations must alter according to the prescriptions of the new norm for it
to attain the status of Customary International Law. 43 In the absence of any such clear intent
among nations in incorporating the above two requirements of Customary International Law,
the concerning question is how PPP has been incorporated into municipal law. Therefore, PPP
stands on a weak legal foundation mainly because its salient features have yet to be finalized
by International Law jurists.

In Oleum Gas Leak Case44, where Oleum gas leak from ‘Shriram Food and Fertilizers Ltd.’,
a complex at Delhi killed many innocents and a practicing lawyer in a nearby court in Delhi,
the principle of Strict and Absolute Liability was imposed where the defendants were forced
to pay compensation to the victims. Similarly, in the case of Vellore Citizens Forum vs union
of India45, where industrial pollutants and other toxic substances where released into a nearby
river which affected a large number of people who depended on the river as a source of drinking
water, the court took a serious cognizance and directed the polluters to pay compensation by
reiterating the concept of Sustainable Development. Also, in Indian Council for Enviro-Legal
Action vs Union of India46, a PIL was filed against the economic deration of coastal areas and
for protection of the same. The court upheld “Precautionary Principle” by stating that polluters
should compensate if adequate precautionary measures aren’t taken to protect the environment.
Thus, the above landmark three cases set the benchmark by preventing polluters from taking

41
Germany v. Denmark & The Netherlands, [1969] ICJ 1; see also 1969 ICJ Reports 4, 50.
42
Supra note 35, p. 167.
43
Donald K. Anton & L. Shelton, Environmental Protection & Human Rights, (1st Ed., Cambridge University
Press, Cambridge, 2011), p. 194.
44
Supra note 16.
45
Supra note 17.
46
Supra note 15.

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environment for granted and by imposing a duty and responsibility in equally protecting the
environment.

Thus, both India and UK adopted PPP on a different footage. In UK, the development of PPP
came as a redress mechanism to Land Contamination and as a counter rehabilitative measure.
Hence, the polluter was forced to compensate the damage caused. UK, being a member of
various International Conventions and Treaties including OECD recognized the need of PPP
to curb the growing menace of environmental pollution. On similar lines, India (being a non-
member of OECD) also adopted PPP as inevitability to primarily protect environmental
degradation from unscrupulous polluters as the costs to repair the environment each time was
a very great burden to the Indian Government.47

47
Supra note 31, p. 143.

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CONCLUSION & SUGGESTIONS

The idea that polluter should be made to pay for damages that they cause to health and property
in a free society based on Rule of Law should be the guiding principle for all environmental
policies. The notion that environmental problems are essentially about interpersonal conflicts
over the use of resources has been taken completely out of the equation. A correctly constructed
PPP would highlight the fact that there is no tension between liberty and economic efficiency
on the one hand and sound environment stewardship on the other. Environmental pollution by
setting the stage for efficiency based Environmental management through the proper use of
market mechanisms. PPP can also be made more effective by:

1. Adjusting incentives so that the polluter pays the cost of uncertainty.

2. Developing scientific methods to determine the potential costs of uncertainty vis-à-vis
Environmental damage;
3. Implementing the laws strictly laid down by the government for preventing pollution
through monitoring;
4. Including efficiency in environmental management through proper use of market
mechanism;
5. Offering appropriate incentives to reduce the detrimental effects of high risk activity.

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