30 Pages

The ‘Non-Polluter Gets Paid’ Principle for Third World Commodity Exports

WithHenk L.M. Kox

This chapter argues that the creation of an economic instrument is feasible for the most important export sector of developing countries, namely exports of primary commodities to OECD countries. It aims at integration of environmental externalities in the commodity prices paid. Ironically, the ecological ‘comparative cost advantage’ of Third World exporters is an argument for OECD producers to demand protectionist measures against the imports. In OECD countries a large number of environmental policy instruments associated with the ‘Polluter Pays’ principle is developed. Although powerful ecology movements hardly exist in most Third World countries, their governments are more and more aware of the need to minimise damage to the environmental resource base that supports their commodity exports. The World Bank ‘ecologised’ its policy since 1987 and supports transfer of sustainable production technologies to Third World governments.