A Normative Approach to Incorporate Affordability Criteria for Industrial Sectors in the Design and Implementation of Environmental Policies: A Case Study Illustration

While we can rely on markets to match producer supply with consumer demand for most goods and services, markets fail to yield the socially optimal outcome in the case of pollution so that government interventions are desirable. However, determining the "right" level of environmental protection is a question that holds both a social and a political component. Policy makers are not only concerned with the net social benefit of environmental measures, but also with the consequences for those who have to bear the costs. We describe a normative approach to integrate affordability criteria in the implementation of environmental policies. We focus on the affordability of abatement measures for the industrial sector. Subsequently, we illustrate our approach and suggested cut-off points by means of some case studies. The cases show that affordability criteria can support policy makers in their assessment of candidate "Best Available Techniques" under the European Directive on Integrated Pollution Prevention and Control as well as in the assessment of alternative programmes of measures to achieve good water status under the European Water Framework Directive. The criteria presented are a tool for objectifying the discussion between industry and policymakers about the affordability of environmental measures. xpert judgement and negotiation remain essential in defining and implementing environmental policy.