2.5 NEW PROPOSED POLICY INSTRUMENTS FOR ENVIRONMENTAL PROTECTION¹

As noted earlier, environmental degradation has emerged as one of the important issues of the century and has resulted in new approaches to supplement penal laws and environmental protection. These are outlined in the NEAP² as environmental impact assessment, economic instruments and public participation.

2.5.1 Environmental Impact Assessment

One of the policy instruments considered most effective for the achievement of sustainable development is the requirement that environmental impact assessment (EIA) shall be undertaken for all proposed activities that are likely to have significant adverse impacts on the environment and which are subject to a decision of a competent national authority³. The National Environmental Action Plan perceives the objective of EIA as "allowing maximisation of long-term benefits of development while maintaining the natural resource base."⁴ However, the objectives of EIA are broader as they seek to protect the environment in the wider sense, and not just the natural resources. Thus, an activity which would raise noise levels near a hospital or school or which can affect the human-made environment such as archaeological sites, historic towns, monuments and artifacts or relics, may also be subjected to environmental impact assessment. Such assessment forms the basis for refusal of permission to undertake a particular activity or grant of permission with conditions necessary to minimise the effect on the environment. Different countries have adopted different elements of the traditional EIA process, which originated in the U.S. For example, some countries mandate EIA for all projects, while others limit the process to those which have a certain level of government involvement, such as the requirement of licensing and permitting or the expenditure of funds, and a test of potentially significant environmental impacts. Because EIA is not yet enshrined in law in Tanzania, when an EIA is required, the particular framework will depend on the requirements of the requiring agency⁵.

2.5.2 Use of Economic Instruments

Traditionally, environmental protection litigation and standards have been enforced through imposition of negative sanctions prescribed by the laws themselves. This approach is increasingly supplemented by use of economic instruments.

2.5.3 Tax Relief and Subsidies

Taxation is mainly a government instrument for raising revenue, however taxation may also be used to achieve other objectives such as encouraging or discouraging certain activities or behaviour. The government can use taxation to support environmental protection by waiving or imposing lower taxes on environmentally friendly technologies or products. Governments can also induce compliance with environmental standards by providing government subsidies for those who adopt methods of abating pollutants which arise from production or consumption. The NEAP indicates that tax relief and subsidies are among the key policy instruments the Government of Tanzania will deploy in pursuit of sustainable development. However, the possibility of this happening depends much more on the current fiscal policies and realities. At the moment, the country is facing difficult budgetary problems and the International Monetary Fund, World Bank and other donors who support both the development and recurrent budgets are strongly against tax relief and government subsidies. These options are therefore not likely to be used in the near future.

2.5.4 Environmental Taxes

Taxation may be, and has been, used as a disincentive to environmental degradation by imposing taxes on environmentally damaging processes, products, as well as consumption patterns. In addition to the preventive aims, taxes so raised have been committed to environmental protection activities. Normally, taxes on a particular industry or product would go to support remedial measures for the element of the environment damaged by the industry or product. For example, money raised from taking wood products of a particular tree may be used in planting new trees of the same species. The NEAP proposes the establishment of an environmental tax on permits, imports and domestic goods, earmarked for the following areas:

1. Air pollution enforcement and subsidy programs
2. Water pollution enforcement and subsidy programs
3. Solid waste management/pollution enforcement and subsidy programs
4. Protection of public health through enforcement of public health laws, and
5. Land reclamation activities⁶.

2.5.5 Polluter Pays Principle

The "polluter pays principle" refers to a devise of internalizing environmental costs by making those who benefit from the environmentally damaging activity bear the costs of the damage. The polluter pays principle is implemented through charging polluters for the right to pollute. This may be achieved through a variety of means, including taxes and fees on licenses. The difference between these kind of taxes and environmental taxes discussed above lies in their respective objectives. While "green taxes" aim at raising money from polluting activities with the principle objective of putting the sums so raised into environmental protection, "polluter pays" taxes are mainly intended to punish the polluter without necessarily using the monies raised for environmental protection activities. The other method which is increasingly being used to implement the polluter pays principle is the legal imposition of compensatory damages as well as environmental reparation features which hereto have seldom been included in pollution control legislation. In the near future, compensation and reparation (in the form of environmental clean-up) are features likely to replace penal sanctions as the main characteristics of environmental law. This in turn will dramatically increase the cost of polluting the environment.

1. For a stimulating account of the evolution of policies and approaches of environmental protection, see M. Nicholson. The Environmental Age. Cambridge University Press, Cambridge, 1986.
2. NEAP 1, p. 3.
3. See Principle 17 of the Rio Declaration.
4. NEAP, p. 3, para 8(a).
5. At least one government policy suggests that EIA will soon be law: The National Parks Policy now "requires" EIA for all proposed projects in national parks. These may take the form of incentives such as pricing, tax relief and subsidies but may also take the form of disincentives such as environmental taxes and resort to the "polluter pays" principle.
6. See p. 43, para 5.2.6 (k).