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the environment. An important objective of policy-makers is to expand this incentive framework to achieve broader waste man- agement objective through recycling and reuse of such products as tires, plastic bags, batteries, and cars.


Refundable Bond System This system provides for the col-

mitigate the economic impact of environ- mental regulation. In the latter context, the individuals, and corporations to meet com- pliance costs. At various times subsidies have been given on installation of solar heaters and gasoline. Regulators are statu- torily urged to incorporate use of subsidies to encourage beneficial environmental activities.

lection of a financial sum as security against activity which could cause special environmental injury; the money being refundable on proof that the activity in question was carried out in an environmen- tally acceptable manner. The scheme has particular application to environmental con- ditions imposed for conducting develop- mental projects where the regulators have been determining bonds based on a per- centage of the capital value of the project in the absence of any method of assessing the value of vegetation, reefs, and other environmental assets at risk. Bonds may also be used to induce satisfactory waste management practices.


Administrative Charges

This charge, often in the form of a non-refundable fee, effects cost recovery in respect of expenditure associated with management functions. Among existing charges are those intended to pay for the administration and enforcement of the per- mit and licensing system. Administrative charges are widely employed where costs are incurred in taking remedial action where offender fails to act – recovery allowed often as a civil debt. The notion also has applica- tion where individual benefits from environ- mental protection or improvement work and in the planning context.

7.2.10 Subsidies

A subsidy may take the form of a grant, loan, or tax incentive. Essentially it is some form of financial reward offered by regulators to encourage pollution control or

7.2.11 Tradable Permits/Market Creation

A suitable regulatory framework may cause creation of a market for owner- ship of environmental ‘rights’. Tradable pol- lution permits is the classical example o such a market. Regulators issue certain number of permits which (based on agreed emission standards and criteria) contain pollution within acceptable limits. Producers who keep their emission below their allotted threshold may sell or lease their surplus permits to other producers. This can lead to the trading of these commodities on the stock market.

The integrity of the system is heav- ily dependent upon calculations of the net emission from each permit holder, a rather elaborate science and inspection and mon- itoring. Legislative initiatives have called for the establishment of the infrastructure that would allow creation of markets in tradable permits. Requirements for development of emission standards, award of permits and monitoring and compliance have been made and comprise the basic market requirements. As a rule these are not yet in place. Further, there is no legislative treat- ment with the question whether a permit or license is transferable. Nor is there any indi- cation that the total quantities of emission over a stated period of time have been esti- mated to reflect acceptable ambient condi- tions. nor with the central question whether the permit or license is transferable.

The principle of prescription pro- vides a common law notion with implica- tions for market creation in tradable per-

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