Monetary compensation for polluting environment is prescribed by the legislation of developed nations. Several European countries, as well as the US and Australia, secured the polluter pays principle in their environmental laws. It comes in form of an ecotax that does not allow industries to emit an excessive amount of toxic gasses. In many countries, producers shall pay fines also for an occasional damage done by their industrial facilities. Polluter pays principle also refers to recycling wastes and byproducts of industrial activity. Rio Declaration on Environment and Development issued at the Earth Summit of UN in 1992 is a major international agreement that secures the polluter pays principle. The document mostly concerns greenhouse gas emissions that accelerate climate change.
Despite the existing regulations, many industries are not held responsible for the environmental damage. Some powerful industrial nations have lenient environmental policies, and the others do not restrict themselves with extra legislation at all. Society that is targeted on making profit still treats natural resources as common goods that everyone has a right to use. Businesses that cannot thrive because of environmental policies prefer to outsource their facilities to third-world countries that do not care so much about pollution.
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Some form of the polluter pays principle was prescribed under the Kyoto protocol that terminated in 2015 and was succeeded by the Paris Agreement. The document imposed trade in carbon credits that were special permits for emitting greenhouse gas. Convention countries purchased certain number of credits and were not allowed to emit more carbon dioxide than the amount stated in the permit. The effect of the Kyoto protocol was quite average, nevertheless, the principle of purchasing credits was a reasonable one.
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