Analyzing the Polluter Pays Principle Through Law and Economics

Abstract

This essay is divided into several parts. Part II outlines the basic concept of the polluter pays principle and its economic rationale. Part II then critiques the important conceptual and practical weaknesses of the polluter pays principle. Part III analyzes Ronald Coase’s and Guido Calabresi’s systems for dealing with pollution and nuisance problems. Part IV analyzes the workability of the Coase and Calabresi models and discusses whether those paradigms may be reconciled with the polluter pays principle. Finally, Part V suggests an alternative environmental regulation scheme based on economic considerations that are radically different from current mainstream economic models.

Keywords: Polluter Pays Principle, Stern Review, International Environmental Law, Environmental Economics, Environmental Law and Economics, Eco-Criticism