Polluter-Pays-Principle: The Cardinal Instrument for Addressing Climate Change

This article traces the evolution of polluter-pays-principle (PPP) as an economic, ethical and legal instrument and argues that it has the potential of effecting global responsibility for adaptation and mitigation and for generating reliable funding for the purpose. However, the contradiction is that while it rests on neoliberal market principles, the UN Framework Convention on Climate Change did not include the PPP as its provision though the principle of “common but differentiated responsibility based on respective capabilities” (Article 3.1) implicitly recognizes this. The article raises the basic question that under a free-market global system: why should the polluters not take responsibility of their actions so that the global society does not suffer? The Organization of Economic Cooperation and Development (OECD) countries apply this PPP in many of its forms. Some developing countries are also applying it albeit still more as a governmental rather than polluter responsibility. Currently there is an emerging consensus that a carbon tax should be applied globally to address the intractable problem of climate change. Since the problem relates to a global commons, the issue is how to apply the PPP globally yet equitably. This article brings in Caney’s proposal that as complementary to the PPP. The “ability to pay principle” (APP) can take care of emissions of the past agreed by the Parties and current and future legitimate emissions of the disadvantaged countries and groups of people. He calls the latter poverty-sensitive PPP. While PPP is primarily a market principle, APP is a principle of justice and equity. That polluters should pay the social and environmental costs of their pollution reflects the most fundamental principles of justice and responsibility.