EXAMPLE OF INDUSTRIAL POLLUTION: INDIAS TOXIC CORRIDOR
The road from Ahmadabad to Mumbai refers as the Golden Corridor of Chemical industry. Also known as cancer corridor or the toxic corridor. At least 2000 industries compete for resources in this narrow belt. Virtually every river Sabarmati, Mini, Tapi etc that enters the corridors leaves carrying lethal loads of ind. poison and listed as critically polluted by World bank in 2000.
ENVIRONMENTAL POLICY
Regulatory instruments are common in both developed and underdeveloped nations. Also K/a command and control(CAC) instruments not consider efficient because of the reasons: (i) They lead to non-optimal allocation of environmental abatement measures across sources. (ii) They involve large information, monitoring and enforcement costs. (iii) increasing burden of cost.
CRITERIA TO ASSES POLICY INSTRUMENTS
OECD has identified the following criteria to asses the performance of env. Policy instruments 1. Environmental effectiveness 2. Economic efficiency 3. Equity 4. Administrative feasibility and cost 5. Acceptability
1. ENVIRONMENTAL EFFECTIVENESS..
Use to judge environmental goals. Effectiveness of environmental policy instruments depends on the response of polluters. It is effective when polluting agents can be made to comply with the standard set by the environmental agency It is ineffective when polluters can successfully evade some policy instruments.
2. ECONOMIC EFFICIENCY. It is the ability to influence producers decisions. Individual have a tendency to ignore external cost in their decisions making but this cost falls on the neighbors or society at large. So producers decisions w.r.t output will become economically efficient if any instrument internalizes the social cost of pollution.
3. EQUITY..
Environmental policy instruments affect the distribution of income and wealth. In the absence of these, polluter will get away without paying for the pollution they do. If they are applied, there is some economic cost that the polluter must bear.
4. ADMINISTRATIVE FEASIBILITY AND COSTS
It is not enough for efficiency that a particular instrument is such that the cost of adjustment and implementation get minimized. But also that the total cost of adjustment, enforcement, implementation and administration are minimized. So this is important in consideration in the choice of instruments.
5. ACCEPTIBITY.
It is the acceptability of the environmental policy instruments to the concerned group of people. If it is opposed by the target groups then enforcement cost would increase considerably which affect effectiveness and efficiency. A/c to OECD, the acceptability can be increased under the following measures: (i) By providing adequate and timely information about the specific features of the instruments to target groups.
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(ii) By having consultations with the target groups in respect of execution of the instrument. (iii) By progressive implementation to give sufficient time to the polluters to adjust to the new situation. NOTE: The polluters pay principle(PPP) is acceptable internationally which suggests that the polluters should bear the cost of pollution abatement.
ENVIRONMENTAL POLICY INSTRUMENTS
These are of three types: 1. Communicative instruments 2. Economic instruments 3. Regulative instruments
1. COMMUNICATIVE INSTRUMENTS.
These instruments such as information on cleaner alternatives, persuasion, voluntary environmental management at the firm level are effective only when their adoption is relatively less expensive or if firm find them economically beneficial in two ways: (i) If they build up environmental friendly image. (ii)If their pollution preventing cost is lower.
2. ECONOMIC INSTRUMENTS..
They influence the behavior of polluters by offering economic incentives to renounce their pollution prone behavior. The most common instruments adopted for pollution abatement are: a. The system of pollution fees or charge that implies levying of a pollution charge per unit of pollution discharge. b. Tradable permits or marketable rights that offers flexibility to the polluter to decide how much pollution he would do.
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c. Subsidies for pollution abatement that may be effective in individual cases but to industry as a whole they do not give right price signals. d. Deposit refund systems require that a potential polluter is taxed in advance and the tax is refunded if a proof is provided that the specified environmental damage has not occurred. e. Liability legislation that requires the polluter to compensate the environmental damage he caused.
3. REGULATORY INSTRUMENTS.
The most common environmental policy instruments world over though economists are highly critical of them. Accordingly there are two basic regulatory instruments: (i) There should be emission standard that specifying allowable emission per unit time. (ii) There should be design standard that specify pollution control technology or process characteristics.