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Together with equity and social considerations, three closely-related principles should guide the choice
and design of policy instruments:
The (PPP) is anchored in the 1992 Rio Declaration on Environment and Development
(UNEP 2009a) and embedded in a growing number of national environmental policies (e.g. most
oECD countries and EU Member States). It requires environmental costs to be ‘internalised’ and reflected
in the price of goods and services. To this end, the polluter has to take measures to prevent or reduce
pollution and in some cases pay taxes or charges for pollution and compensate for pollution impacts. For
ecosystem degradation, this means that the polluter should pay directly for clean up and restoration costs
or pay a fine that would help offset damage costs.
The is a variant of the PPP. Where an action provides a benefit e.g. use
of natural resources, recipients should pay for the cost of providing that benefit. This could be used to
argue that e.g. users of a clean beach should contribute towards beach cleaning expenses.
The provides that the full costs of environmental services should be recovered
from the entity benefiting from the service. There is a growing trend internationally for this principle to be
applied directly and explicitly to energy, electricity and water pricing which means that full costs are passed
on to consumers.
TEEB FoR NATIoNAL AND INTERNATIoNAL PoLICy MAKERS - ChAPTER 7: PAGE 5