Nov. 14 2022

As COP27 continues in Egypt the big issue at the forefront of this year’s climate debate is that of loss and damage, and the impact that significant carbon-emitting countries are having on the developing world.

Whilst concerns for world leaders inevitably lies with the cost to their economies, leading sustainability expert, Bureau Veritas, is serving a reminder that a lot of the framework for achieving equity in the ‘polluter pays principle’ is already in place.

In the UK and Europe there already exists a robust permitting and licensing arrangement, which dependent on the sector and the size of the operation, allows businesses to release a certain amount of emissions per year, with penalties and fines for those who exceed their set limits.

This ‘polluter pays principle’ applies to any business emitting gases that may cause harm on the environment – typically focusing on those with legal limit values set in law. The permitting and licensing regime is proportionate and risk-based and applies across all scales of emissions-generating companies, ranging from a small independent car respraying unit to a multi-national steelwork (for which multiple permits may be required across a wide range of processes).

The torrential floods in Pakistan this year offers a clear example of the impact that climate change can have, and why leaders of developing countries are lobbying for a ‘loss and damage’ fund. This concept sees countries which have contributed the most greenhouse gas emissions pay poorer countries a subsidy to help them recover from the resulting natural disasters. It is likely that such costs would need to be covered through taxation of the higher polluting contributors within a country, the detail of which is currently lacking.

With this year’s COP giving a sense of higher urgency for action, and offering a voice to developing nations, Dr Richard Maggs, Head of Environment & Sustainability Affairs at Bureau Veritas, asserts the need for a clearer outcome for loss and damage, and the polluter pays framework.

Richard Maggs

Head of Environment & Sustainability Affairs

Bureau Veritas

In the UK we have had a pollution prevention and control scheme which applies to certain sectors and polluting industries to varying degrees based on their size, associated emissions, and ability to pay. The regime has financial levies which vary from small polluting businesses, which are licensed by the relevant local authority, to the more significant polluting businesses in heavy manufacturing, energy and industrial sectors which are permitted by the relevant agencies, i.e., EA, SEPA, DAERA and NRW in England, Scotland, Northern Ireland and Wales, respectively.

Whilst there has always been a discussion around the extent of fees levied for such ‘permitted pollution’ the regime provides for a clear legal framework for infringements of permits to be identified and penalties and fines placed upon those companies not adhering to the permitting regime. As greater demand for further emissions reductions arises, a permitting and licensing scheme provides for the ideal framework for achieving this goal.

Richard goes on to say: “Whilst the challenges of agreeing a global ‘polluter pays’ framework for greenhouse gases across the globe should not be underestimated it shows that existing national frameworks in the UK, Europe and elsewhere across the globe - already exist. Tie this in with the addition of a framework that protects and re-instates some of the most valuable natural assets – such as the rainforests in Brazil, Democratic Republic of Congo and in Indonesia, we may get to the stage where safeguarding the commitments to the 1.5°C could be achieved. This needs to happen quickly, and it would be a shame for COP27 not to give shape to a clearer outcome on this. The world is currently at risk if losing the focus on the 1.5°C goal.”

Bureau Veritas is a global leader in sustainability, environmental and air quality consultancy services, supporting private sector clients, local authorities and governments on various projects and policy areas. It is able to work with businesses and councils to put in place permitting and licensing arrangements in line with the polluter pays principle and offer further advice and specialist expertise on putting in place sustainable business strategies which align with the UK’s Net Zero ambitions, whilst providing independent verification of reported emissions and emissions reductions for clients set against legislative and voluntary targets.