Environmental policy and fiscal instruments in The Netherlands

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Environmental policy in The Netherlands started in the 1960's; water and air pollution had become urgent problems, which needed to be tackled. Later, other environmental problems emerged related to the economic development and the growing population of the country. In the past, new policies have been developed and a number of environmental laws have been installed to deal with the various environmental problems. Next to the development of these classic command-and-control instruments, a lot of attention was—and still is today—given to the role of other instruments, such as economic instruments, social instruments, and communication instruments. More in particular, the use of a combination of these instruments, tailormade for specific environmental problems and situation, has played a major role in the implementation of Dutch environmental policy. Among the various economic instruments, fiscal instruments tend to become more and more important. The way to finance the costs of the environmental policy has been one of the main topics from the very start of the environmental policy making. The basic principle of the financing system of the costs of the environmental policy in The Netherlands is the so called “Polluter Pays Principle,” which was adopted in the early seventies by the European Union and by the Organization for Economic Cooperation and Development. According to this principle, everyone who causes damage to the environment should pay for the costs-related to that damage.