Abstract
Industrial pollution accounts for a large proportion of global pollution, and in the European Union, an integrated pollution and prevention approach based on individual performance standards has been implemented to regulate emissions from industrial plants. Crucial for the assessment of the licensing conditions are the Best Available Technique (BAT) requirements, which should be set in accordance with the recently introduced Industrial Emissions Directive (IED). In this paper, we review and assess the licensing of industrial plants in one of the Member States, namely Sweden. Specifically, we discuss how the existing regulations (including the IED) manage to address potential trade-offs between important regulatory design issues, such as flexibility, predictability and the need to provide continuous incentives for environmental improvements. The analysis indicates that while the EU regulations provide flexibility in terms of the choice of compliance measures, in Sweden, it enters an existing regulatory framework that adds a lot of uncertainty with respect to the outcome of the licensing processes. An important challenge for the implementation of the IED is to implement performance standards that lead to continuous incentives to improve environmental performance in industrial sectors without, at the same time, adding new uncertainties. While standards ideally should be both flexible and predictable, achieving one of these criteria may often come at the expense of the other.
Highlights
IntroductionIntroduction and AimAir pollution, in particular combustion products stemming from fossil fuels and biomass, is a major threat to human health and the environment [1,2]
Introduction and AimAir pollution, in particular combustion products stemming from fossil fuels and biomass, is a major threat to human health and the environment [1,2]
This paper does not provide an explicit test of the Porter hypothesis; instead, we address the issue of how environmental regulations should be designed to increase the probability of Porter outcomes
Summary
Introduction and AimAir pollution, in particular combustion products stemming from fossil fuels and biomass, is a major threat to human health and the environment [1,2]. The environmental regulation of industrial plants differs across countries in terms of tax policies and legal tools (e.g., licensing procedures) and their specific design and implementation. This is the case even if we restrict ourselves to the range of various legal actions available for industrial pollution control; the objectives and the motives underlying these regulations have tended to change over time; cf [1]. The market-based instruments have largely constituted complements, rather than substitutes, to the already existing regulations This is not the least bit valid in the case of the regulation of point-source pollution at industrial plants, for which individual licensing and standards have maintained an important role in environmental policy. The flexibility provided by the market-based instruments in terms of the selection of pollution abatement measures has spurred an increased interest in how the licensing processes and standards can be designed and implemented in a more flexible, transparent and preventive way, so as to maintain strong incentives for improved environmental performance without comprising economic goals [3,5]
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