ABSTRACT
Environmental law has become the news, which features on the front page of newspapers and hits headlines on prime time. The spread of industrialization and urbanization has caused significant and direct impact on the environment. Environmental problems are soaring and are increasing at an alarming rate. 1 The degradation of the environment has raised concerns and has alarmed the society. These constant changes and direct impact on the environment prompted the legislatures to enact rules, regulations and by-laws for the protection of the environment. The international arena has dedicated institutions and organizations, which have laid down model code of conduct for protecting the environment. The Rio conferences, inclusion of environment in corporate social responsibility norms and other endeavours have shown the importance of including this social endeavour as a prime consideration. Property law, contract law and tort law have become the basis on which environmental liability is modelled. All production activities affect the environment, which in turn has severe consequences on the health and well-being of people affected. This social cost has now become an imperative part of all environmental economics. In this chapter the author seeks to analyse the economic rationale behind environmental torts. The first part of the chapter addresses the existence of environmental social costs. It then focuses on the manner in which such costs can be successfully internalized with the help of the welfare theory. The next part of the chapter addresses the interpretation of environmental torts and its effect on property rights with the help of the Coase Theorem. The chapter then proceeds to address concepts of environmental nuisance and the conflict between injunctive remedies and damages remedies. Finally, the chapter deals with economic analysis of environmental torts in India.
