Pollution is a negative externality – a cost to society. To reduce pollution, the government can use four main policies – tax to raise the price, subsidies alternatives, regulations to ban certain pollutants and pollution permits. Government policies to reduce pollution Tax. E.g. Carbon tax, which makes people pay the social cost of pollution.

1.        Subsidy. E.g. subsidy of alternative energy sources.

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2.        Pollution permits, e.g. carbon trading schemes where firms are given the right to pollute a certain amount; these permits can be traded with other firms.

3.        Regulation. Limits on a number of pollutants that can be discarded into the atmosphere.

4.        Changing consumer behavior – e.g. through advertising, nudges.

Governments around the world are encouraging people to factor the environment into their everyday lives and purchases. Is it leading to more sustainable consumption? Are households ‘going green’?

These are some of the critical questions addressed in the OECD’s Greening Household Behavior. Focusing on five key areas where households exert pressure on the environment – energy, water, transport, food and waste – the report surveys more than 12,000 households in 11 countries to identify whether governments – and people – are on the right track. Price incentives are the key to spurring change. For instance, the survey finds that ‘pay-as-you-throw charges’ encourage people to generate 20 – 30% less waste and that households paying for the amount of water they consume are more likely to use it efficiently. Some households are also changing their eating habits – the percentage of household spending on fruit and vegetables carrying the organic label has increased over the past couple of years and now ranges from 13% in Israel to 35% in Switzerland.

But influencing household practices remains a major policy challenge. Better and more trustworthy information is essential. For example, while 83% of the Dutch surveyed trust the European Union’s new organic food labels, only 47% of Swedes do. And the survey shows that almost one in five households say they do not know what recycling collection services are available in their area.  

Governments can lead the way by supplying environmentally sound public services and infrastructure to foster the transition to sustainable consumption. The survey notes numerous examples in which provision of relevant services can change behavior: good public transport is the most important factor encouraging people to drive less; proximity to recycling bins reduces waste generation and increases recyclable waste separation; and people satisfied with the quality of their tap water are less likely to buy bottled water.

In 1990, Congress passed the Pollution Prevention Act which states: “the Environmental Protection Agency must establish a source reduction program which collects and disseminates information, provides financial assistance to States, and implements the other activities.” EPA is responsible for implementing the law passed by Congress called the Pollution Prevention Act of 1990.

The “Findings” section of the Pollution Prevention Act of 1990 explains why Congress passed the P2 Act and are briefly captured below:

·         The United States of America annually produces millions of tons of pollution and spends tens of billions of dollars per year controlling this pollution.

·         There are significant opportunities for industry to reduce or prevent pollution at the source through cost-effective changes in production, operation, and raw materials use. 

·         The opportunities for source reduction are often not realized because existing regulations, and the industrial resources they require for compliance, focus upon treatment and disposal, rather than source reduction.

·         Source reduction is fundamentally different and more desirable than waste management and pollution control.

The Pollution Prevention Act establishes a national policy that EPA implements:

·         Pollution should be prevented or reduced at the source whenever feasible;

·         Pollution that cannot be prevented should be recycled in an environmentally safe manner whenever feasible;

·         Pollution that cannot be prevented or recycled should be treated in an environmentally safe manner whenever feasible; and

·         Disposal or other release into the environment should be employed only as a last resort and should be conducted in an environmentally safe manner.




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