History and Evolution of the Polluter Pays Principle: How an Economic Idea Became a Legal Principle?

Abstract

This work traces the history of the polluter pays principle (the PPP) in the early economic literature from 1920s. The OECD recommended the PPP as the ‘Guiding Principle Concerning the International Economic Aspects of Environmental Policies’ in 1972. In 1973 the Council of the European Communities approved the First Program of Action on the Environment and the PPP was made one of the principles of the Community environmental policy. The PPP has been mentioned as one of the principles in many regional and international conventions. Thus, the polluter pays principle is one of the most efficient principles of environmental policies.

Keywords: The Polluter pays principle, the OECD’s guiding principles, OECD’s Environmental policies, The European Union (Communities), Programme of Action, Efficient environmental principle, internalization of external costs, externality, spillover costs, pollution, taxes and charges.