ABSTRACT
Poland has created a kind of quasi-market focusing on environmental protection and clean-up. New institutions for sustainable development, including the self-financing framework and strong environmental law enforcement mechanisms, have helped draft market forces to serve environmental protection. Poland's self-financing system for the environment is based on a basic precept of environmental economics: the 'polluter pays principle'. This chapter shows that Poland has developed a unique solution to the difficulties facing environmental protection by institutionalizing self-financing and decentralizing the funds. In addition to national, voivodship and local environmental funds, two others — the Forestry Fund and the Farmland Protection Fund — are also regarded as ecological funds. Another institutional innovation providing environmental funds to potential investors in Poland is the Bank for Environmental Protection. One of the most innovative ventures in Poland is the debt-for-environment swap. Poland entered into a separate debt-for-environment swap with Finland, which is managed by a special Polish-Finnish Task Force.
