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You are here: Home > Orientation Hall > Exchange of Experience Modules > V. A. Role of various environment-related measures
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a. Environmental quality promotion
This approach to encouraging responsible environmental behaviour is to educate and inform both consumers and producers. For example, the government could require firms to disclose information on the pollutants they generate. This information is then conveyed to consumers. While sanctions are not applied, consumers are free to choose how they will react to the products of particular firms. The government could also provide information to firms on pollution abatement technology and improved industrial processes.
b. Liability legislation
In this approach, the polluting firm is required by law to financially provide compensation to individuals or communities who are adversely affected by its operations. There are two main forms of liability legislation: performance bonds, or environmental guarantee funds, and zero net impact legislation. Under performance bonds, the most common of the two, the firm posts a long-term performance bond for potential or uncertain hazards associated with the proposed activity. In zero impact legislation, the firm is legally required to ensure that environmental damage occurring in a particular area is compensated elsewhere. For example, if construction of a highway disrupts electricity supplies to a nearby community, the firm is required to pay for restoration of the service for those affected.
Example
Australia: The Great Barrier Reef Marine Park Authority (GBRMPA)
Since 1987, performance bonds are required to be posted for any structures on the barrier reef as part of permit to restricting the type of activities allowed on the location. (More...)
Fantasy Island: Use of performance bonds
A tourist pontoon broke up and sank while being towed in 1988. The developer failed to move the wreckage and the Authority drew on the security bond of A$210,000 to allow a salvage contractor to complete the work.
Pacific Pearls: Use of performance bonds
A pearl culture operation was abandoned in 1990 following cyclone damage. Culture equipment was removed from the Park using the A$7,000 security bond.
c. Zoning, fines and bans
Finally, there is a variety of other policy instruments for integrating environmental concerns into economic decisions. These include zoning, fine and bans. Zoning is basically land use restrictions usually applied in urban areas. In most local and urban areas, there are also fines for spills and bans or restrictions on the transportation and storage of hazardous material.
d. Poverty alleviation and family planning programmes
Population growth, poverty and environmental degradation are closely interrelated. For example, increasing population leads to more intense use of land, shorter fallow periods and lower soil productivity. It also leads to more clearing of forest cover and hillsides. The net result of these effects is that there is increased environmental degradation (e.g., soil erosion, mudslides, and so on), reduced soil productivity and, hence, lower yields. This results in a fall in per capita incomes and an increase in poverty. The poverty then creates a vicious cycle in that it leads to further land degradation as the poor desperately try to eke out a living on the marginal land. One way to reduce family size and poverty is to improve family planning programmes, and to increase education and employment prospects for women.
e. Banking procedures
In order to encourage potential investors to reduce environmental risks and adopt sustainability principles in their operations, it is necessary for lending institutions to conduct environmental risk assessment before granting loans. Environmental risk assessment is normally undertaken through a subjective appraisal of environmental exposure effects. The process begins with an environmental audit, sometimes involving a site inspection. In some cases banks can specifically tie loans to eco-improvement schemes such as energy efficiency (e.g. purchase of solar heating, long-life lighting). Where necessary, a bank could make the provision of loans contingent on the installation and operation of a better system of environmental risk management.
Other environment-related policies