February 2004: Poisoning the Environment -- Free

Polluters are supposed to pay clean-up costs--but they don’t
February 1, 2004

What is remarkable about the latest environmental law decision from the Supreme Court of Canada is not how ecologically enlightened the Court is (since a series of previous cases had already demonstrated the Justices’ “green” wisdom), but rather the breadth of the gap between the principles of law and the on-the-ground application of those principles.

The case decided by the Supreme Court last fall involved a site in Quebec contaminated many years ago by Imperial Oil. The site was eventually sold, partially cleaned up, and turned into a residential development. When pollution problems returned, Quebec's environment department ordered Imperial Oil to fund a new study about remediation options. the company challenged this order in the courts.

In upholding the Quebec government's order, the Supreme Court agreed with lawyers from the Sierra Legal Defense Fund that the polluter-pays principle is "firmly entrenched" throughout international, federal, and provincial environmental laws. The principle is that, if you make a mess, then you ought to be responsible for cleaning it up. In theory, this is hardly controversial.

In practice, however, Canadian individuals, businesses, and governments rarely pay for the pollution they create. Consider four examples: motor vehicles, industrial activities, abandoned mines, and agriculture.

Motor vehicles, including cars, trucks, and SUVs, spew a motley mixture of pollutants into the air as they burn fossil fuels: carbon monoxide, nitrogen oxides, sulphur dioxides, and carbon dioxide. Do the polluters pay? No. And yet this air pollution has profound health impacts (resulting in 10 times as many deaths in Canada each year as homicides), economic impacts, and environmental impacts (including climate change).

Large industrial operations, such as petroleum refineries, aluminum smelters, chemical factories, and steel plants discharge hundreds of millions of kilograms of toxic substances into Canada’s air, water, and soil each year, as reported to the National Pollutant Release Inventory. What is the cost to these corporations of polluting our environment? Nothing.

Thousands of abandoned mines scar the Canadian landscape, many of them causing serious pollution problems. Mining companies provide reclamation bonds that cover only a small fraction of the costs of cleaning up these contaminated sites. For example, four mines studied by Canada's environmental commissioner in 2002 had bonds totalling $23 million, but the federal government estimates that it will cost up to $680 million to clean up these sites. Do the polluters pay? No, Canadian taxpayers get stuck with the bill.

Agricultural operations in Canada use thousands of tons of chemical pesticides and fertilizers that cause health and environmental damage. Vast volumes of manure from livestock, averaging almost 4,000 kilograms per Canadian per year, also pose health and environmental risks. Who pays for this pollution? Again, not the polluters.

Thus, while the Supreme Court is correct that the polluter-pays principle exists on paper in Canadian law, we have a long way to go in translating the principle into action. Remarkably, there are still examples of Canada paying polluters, rather than making polluters pay, such as ongoing subsidies to the oil and gas industry.

Our failure to apply the polluter-pays principle means that our economy continues to mistakenly treat environmental damage as an externality, as though there are no consequences to pollution.

What are the impacts that polluters should pay for? They should pay the health care costs caused by air, water, and soil pollution; the related economic costs of reduced productivity; and the missed school and work time, estimated to cost Canada billions of dollars due to air pollution alone. More difficult to quantify but still vital costs include damage to wildlife habitat, natural resources, and ecological services.

A recent Conference Board of Canada report found that Canada lags behind other industrialized nations on environmental performance. Our governments complain that they lack adequate resources to increase environmental protection. Yet implementing the polluter-pays principle would generate a substantial source of revenue that could be invested in improving Canada's dismal environmental record, as the Organization for Economic Cooperation and Development has repeatedly pointed out.

An obvious approach would be to use pollution taxes, which set a fee for each unit of pollution generated. The National Pollutant Release Inventory, which already tracks releases of more than 265 toxic substances, could be used as the basis for a national system of pollution taxes, with higher levies for more toxic, persistent, or bio-accumulative substances. The funds generated by pollution taxes could be used to clean up contaminated sites, address air pollution, water pollution, and climate change, or invest in developing cleaner technologies. Pollution taxes would also provide a strong incentive to reduce toxic emissions and switch to safer, cleaner substances.

The Supreme Court of Canada deserves credit for continuing to boldly encourage Canadians to shoulder our environmental responsibilities. The Court observed that growing levels of environmental concern reflect not only self-interest in maintaining our quality of life, but "an emerging sense of inter-generational solidarity and acknowledgement of an environmental debt to humanity and to the world of tomorrow."

By implementing the polluter-pays principle, rather than merely paying lip service to it, Canada can begin paying off that environmental debt.


(David R. Boyd is an environmental lawyer, professor, and author of Unnatural Law: Rethinking Canadian Environmental Law and Policy [UBC Press, 2003]. He is also a CCPA-B.C. research associate.)