BATNEEC: THE ECONOMICS OF TECHNOLOGY-BASED ENVIRONMENTAL STANDARDS, WITH A UK CASE ILLUSTRATION

Abstract

All environmental standards, however implement ed, impose costs on the regulated party. This is true of emission or ambient quality standards, environ mental taxes, tradable emission permits, and stand ards basedon the 'best available technology' (BAT). Not surprisingly, therefore, all environmental reg ulation is, to a greater or lesser degree, the outcome of some political balancing of costs and benefits. Part, at least, of the initial cost is passed on to final consumers (the extent depends on the price elastic ity of demand), which is consistent with thepollut er pays principle (OECD, 1975). The costs of regulation are therefore borne by society as a whole. The benefits of regulation are also shared by society as a whole, although some groups in society may be efit more than others and, where trans-boundary pollution is involved, different countries will re ceive variable benefits.