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Environment

Ensuring that polluters pay - toolkit

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The polluter pays principle is a simple idea at the core of EU environmental policy: those responsible for environmental damage should pay to cover the costs.

This toolkit presents economic instruments used in the EU Member States to make polluters pay.

It was developed by a project led by Institute for European Environmental Policy (IEEP) for DG Environment.

Taxes, charges and fees

Environmental taxes, charges or fees add extra costs to the use of products or services that reflect the environmental harm they cause.

Tradable permits

Trade permit schemes set a cap or quota for pollution in a given area, and only allow actors in that area to pollute according to the quantity of permits they hold.

Deposit refund schemes

Deposit refund schemes charge users an extra fee when they buy a product, which is refunded if the product packaging is returned for recycling or reuse.

Offsetting schemes

In these schemes actors must compensate for environmental damage in one place by paying for equal or greater environmental restoration somewhere else.

Payments for ecosystem services

A variety of arrangements through which financial incentives are offered to actors to encourage them to not cause environmental harm.

Environmental taxes in EU Member States

Myth-busting about polluter pays instruments

While there are many examples of economic instruments designed to make polluters pay in place across the EU, they still only contribute a minor share – less than 10% - of total government revenues in all the Member States.

This section provides evidence to dispel some common myths about green taxes and other forms of environmental economic instruments, that may be standing in the way of their wider adoption.

More information

You can read more about polluter pays instruments across the EU in the study “Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay” by IEEP et al.

Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay - Study
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(3.01 MB - PDF)
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Green taxation and other economic instruments – Internalising environmental costs to make the polluter pay - Annexes
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(3.56 MB - PDF)
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