ES 655

Environmental Management

Policy and Legal Aspects of EM

Module-1
Lecture-5
Amritanshu Shriwastav
ESED, IIT Bombay
([email protected])

Introduction to Environmental Policies

 Environmental policies involve certain measures aimed at achieving a sound

environment.

 An environmental policy is interdisciplinary in nature: technology, economics, natural

and social sciences.

 Hence, to develop sustainable policies, it is important to have good knowledge of the

actual and potential impacts on the environment of certain activities.

 Knowledge of technical characteristics, economic costs, social acceptability, and

possible side effects of alternate policy options is also important.

Environmental Policies either enacted as laws by governing

bodies or created and enforced by government agencies

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 Introduction to Environmental Policies
Key Aspects for Environmental Policies

 Economics and Environmental Policies

 Industries and Environmental Policies

 Ecosystems and Environmental Policies

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Economics and Environmental Policies

 Economic policy instruments should support sustainable development
 One of the sign of sustainable economy is when the costs of environment and health
related issues caused by the economic growth are added to consumer prices
 Sometimes issue arises since these are based on economic theory, which focuses more
on the level of costs and benefits associated with the implementation of environmental
policies than on the quality of the environment
 Can we quantify all the contributions / benefits at all?
 Benefit to whom?

 Immediate benefits from environmental policies are extremely difficult to assess

 Defining the property rights of natural resources
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Economic policies are mostly locally driven (i.e. state or nation), while
environmental policies and effects may become global

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 Economics and Environmental Policies
Sectorial Economic Policies and Environmental Policies

 Agricultural Sector:
 Debate between food production and the environment
 Do current economic policies give more incentive to farmers to occupy marginal lands,
forests etc., use more chemical pesticides and fertilizers, use more groundwater etc. (in
terms of direct or indirect subsidies) than the offered benefits to conserve soil and water?
 Transitional financial assistance for better pollution control technology, equipment, practice

 Forestry Sector:
 Are their more economic incentives to overharvest the forests?
 Are all benefits of maintaining the forests accounted for in calculating the costs?
 Does the trading of forest goods and products (i.e. prices of these products in world trade)
accurately capture the opportunity costs?
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Economics and Environmental Policies

Sectorial Economic Policies and Environmental Policies

 Transport Sector:
 What are the economic policies for different types of vehicles?
 Does tax on different fuel types accurately capture their environmental effects (i.e. petrol vs
diesel vs CNG vs electric)?
 Are we considering environmental effects of the whole life of the vehicle, fuels etc. or only
when in actual transport?
 Are these effects accurately reflected in economics?
 Do our economic policies (i.e. subsidies, taxes and tariffs) promote the use of
environmentally sustainable transport?

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 Economics and Environmental Policies
Sectorial Economic Policies and Environmental Policies

 Energy Sector:
 What are the economic policies for different types of energies, i.e. renewable and non-
renewable?
 Do the economics of energy production and utilization accurately capture their environmental
effects?
 Do our economic policies (i.e. subsidies, taxes and tariffs) promote the use of
environmentally sustainable energy?
 Are our economic policies promoting the energy efficiency (i.e. 2-star, 5-star rating
equipment, wastage of energy)?
 …………..
 ………….. Kulkarni and Ramachandra (2006)

GD-4
GDP: Gross Domestic Product or 'Greed Driven Plunder'? 7

Industries and Environmental Policies

 Industrial sector would typically like to maximize the profit and reduce the cost.
 Are our environmental policies such that industries get an option to ignore
environmental costs in their cost cutting altogether?
 No accounting for any pollution?
 Cost of implementing the environmental policy (viz. emission standard) is more than
the fine for not implementing?
 If environmental costs are to be included in the operational economics, then
industries would try to adopt better and sustainable practices
 Are their incentives for industries to adopt better environmental practices?
 Customer recognition
 Government subsidies and other policy benefits
 Stakeholder pressure?

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 Industries and Environmental Policies

Environmental Management System (EMS)

 Part of an overall management system for developing, implementing, achieving,
reviewing, and maintaining the environmental policy
 Potential for increasing the sale as customer identifies an environmentally safe product

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Ecosystem and Environmental Policies

Environmental Policies for the Ecosystem Conservation and Management

 Policies for biodiversity conservation

 Involvement of local communities
 Policies to include watershed management and soil conservation in all
development activities
 Policies to support for research and information dissemination

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 Environmental Policy Instruments (EPI)

 EPI refer to official actions taken to curb and remove the negative
environmental impacts caused by society

 Indicators of EPI reflect a society’s reaction, and the steps taken towards
sustainable development

Categories of EPI
 Regulatory instruments
 Market based instruments
 Information based instruments

 An EPI may be characterized by more than one category

 Different EPI may be used in conjunction with others for
best results
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Environmental Policy Instruments (EPI)

Regulatory Instruments
 Predominant strategy for pollution prevention since inception of environmental policy
 Generally, a public authority sets standards (including mandate to use particular
technology or process), and then enforces compliance
 Violators punished with formal legal sanction
 Maximum authority to the regulator to control the resource allocation for achieving the
environmental objectives
 Reasonable predictability as to the effect on environment (i.e. how much reduction in
pollution will happen)

Specified Compliance Negotiated Compliance

 It imposes the precise and specific demands on  More co-operative approach between regulators and
the regulated communities the regulated in setting and enforcing standards
 No scope for bargaining and exceptions  Shared responsibility allows greater flexibility in
adopted means and may result in economic
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 Environmental Policy Instruments (EPI)
Market based Instruments
 These try to modify the market such that not accounting for environment becomes
more costly and sometime even impossible to do business
 Favours a market with environment friendly products and services
 Identify and add the external costs of the environment to the actual cost of a product /
service or operational cost of the firm (i.e. tax)
 Subsidies, taxes, charges, proxy market (i.e. tradable pollution permits)
 Not always politically feasible to have high level taxes in achieving environmental
goals

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Environmental Policy Instruments (EPI)

Information based Instruments

 Use of informational measures can further promote implementation of environmental policies

 Promotion of successful case studies (products, processes, approaches) for meeting
environmental goals
 Incorporation of environmental management in curricula of educational institutes
 Public disclosure of the information on environmental performance by any entity
 Promotion of effective training amongst stakeholders
 High profile awards for effective implementation of environmental goals

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