The Polluter Pays Principle

Definition, Analysis, Implementation

As the Polluter-Pays Principle is a fundamental principle of cost allocation, its analysis covers a substantial part of the vast field of environmental resource allocation.

This report, originally published in 1975, presents a selection of relevant theoretical and practical analyses now that the Polluter-Pays Principle must be regarded as a mainstay of Member countries’ environmental policies.

First, in the matter of definitions of the Polluter-Pays Principle, the definition officially adopted by the OECD is outlined, together with an answer to the questions which consequently arise.

With regard to analysis of the Polluter-Pays Principle, one study deals in detail with the economic foundations of the Principle and possible effects of its application, such as on behaviour of the polluting firm.

Lastly, the important problem of implementing the PolluterPays Principle is discussed at some length.