Faure, Michael G. --- "Regulatory Strategies in Environmental Liability" [2009] ELECD 315; in Cafaggi, Fabrizio; Muir Watt, Horatia (eds), "The Regulatory Function of European Private Law" (Edward Elgar Publishing, 2009)

Book Title: The Regulatory Function of European Private Law

Editor(s): Cafaggi, Fabrizio; Muir Watt, Horatia

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847201997

Section: Chapter 5

Section Title: Regulatory Strategies in Environmental Liability

Author(s): Faure, Michael G.

Number of pages: 59

Extract:

5. Regulatory strategies in environmental
liability
Michael G. Faure

1. INTRODUCTION
The question what the particular task of private law is in remedying environ-
mental damage has in recent years been discussed extensively in the literature.
Economists, starting from the idea that, in a situation where transaction costs
are prohibitive and hence private bargaining cannot provide efficient solu-
tions, stress that private law may be one of the instruments to be used to
address the market failure caused by environmental damage. Indeed, the tradi-
tional way in which economists would approach environmental issues is
usually by stressing the fact that there is a reason for law to intervene given
the market failure constituted by the externality resulting from the environ-
mental damage. Law in general should then, stated very basically, have as a
goal that the marginal social costs caused by the externality should be taken
into account by the decision maker. The environmental damage should, in
other words, be internalized.
Lawyers have, with different wordings of course, also pointed at various
benefits of private law in remedying environmental damage. Although they
tend to attach less belief than economists to the preventive function of liabil-
ity rules, legal doctrine also has often stressed that it is important to impose
the costs due to environmental damage upon polluters since this may provide
them incentives to abate environmental pollution. Often legal principles (even
incorporated into international conventions) have been used to justify this
idea. Well known in this respect is of course ...