ABSTRACT
The use of environmental goods typically gives rise to what economists call externalities where social costs linked to environmental degradation are passed on to the community. The polluter pays principle (PPP) mirrors an economic rule of cost allocation whose source lies precisely in the theory of externalities. Accordingly, it requires polluters to take responsibility for the external costs arising from their pollution. In contrast to other parts of the world where the principle has never been endorsed, it has been gathering momentum within EU countries, most of which are imposing environmental charges on polluters. The PPP juxtaposes two terms whose meanings appear self-evident at first glance but become more elusive as one attempts to define them. The act of definition is thus best approached from two different angles. First: who is the polluter? And second: how much must the polluter pay?.
