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Environment and the Economy
113
introduced primarily to address the
environmental problem rather than a
measure to raise general Exchequer
revenues. Transparency surrounding
policy design and implementation,
as well as public consultation, can
be a critical element in successfully
introducing environmental policies.
The polluter pays principle, which
contends that the party responsible
for environmental pollution should
bear the cost of measures to
reduce damage, underpins many
environmental policies and laws,
including for example Irish waste
policy. Notwithstanding that
principle, the distributional effects
of policy measures are equally
relevant, particularly if considered
disproportionate or inequitable. The
impact of environmental policies
on households’ expenditure is
not always well understood, with
indirect effects often dominating.
An analysis by Callan et al. (2009)
highlights the complexity of the
distributional implications of a
carbon tax in Ireland and shows how
the tax weighs more heavily on rural
than on urban households and hits
smaller households harder. A greater
understanding of the distributional
implications of environmental
policy measures will help design
instruments that are considered
proportionate and equitable and still
create an incentive for environmental
protection.
Establishing a sustainable pattern
of development for Ireland is a key
challenge of government (DECLG,
2011), and improving resource
efficiency is a top priority to achieve
this goal. The economic downturn,
for the present, has curbed the
growth in consumption of materials,
natural resources and energy. As
businesses and households adjust
to the new economic climate, it
is also an opportunity to change
patterns of resource use, bringing
the green economy to the fore.
Transforming the economy onto a
resource-efficient path can bring
increased competitiveness and new
sources of growth through cost
savings from improved efficiency,
commercialisation of innovations and
better management of resources.
This requires policies that recognise
the interdependencies between the
economy, wellbeing and natural
capital and the removal of barriers
to improved resource efficiency (EC,
2011a)
References
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