38 Agricultural Harm to the Environment
such as in The Netherlands and Switzerland. A final use for regulations is the des-
ignation and legal protection of certain habitats and species, which are set at
national or international levels.
Economic instruments can be used either to ensure that the polluter bears the
costs of the pollution damage and the abatement costs incurred in controlling the
pollution. They can also be used to reward good behaviour. A variety of economic
instruments are available for achieving internalization, including environmental
taxes and charges, tradable permits and targeted use of public subsidies and incen-
tives. Environmental taxes seek to shift the burden of taxation away from eco-
nomic ‘goods’, such as labour, towards environmental ‘bads’, such as waste and
pollution. Clearly the market prices for agricultural inputs do not currently reflect
the full costs of their use. Environmental taxes or pollution payments, however,
seek to internalize some of these costs, so encouraging individuals and businesses
to use them more efficiently. Such taxes offer the opportunity of a ‘double divi-
dend’ by cutting environmental damage, particularly from nonpoint sources of
pollution, whilst promoting welfare. However, many opponents still believe that
environmental taxes stifle economic growth, despite compelling evidence to the
contrary.^44
There are now a wide range of environmental taxes used by countries in Europe
and North America. These include carbon and energy taxes in Belgium, Denmark
and Sweden; chlorofluorocarbon taxes in Denmark and the US; sulphur taxes in
Denmark, France, Finland and Sweden; nitrogen oxide charges in France and Swe-
den; leaded and unleaded petrol differentials in all European Union (EU) coun-
tries; landfill taxes in Denmark, The Netherlands and the UK; groundwater
extraction charges in The Netherlands; and sewage charges in Spain and Sweden.
However, environmental taxes have rarely been applied to agriculture, with the
notable exception of pesticide taxes in Denmark, Finland, Sweden and in several
states of the US; fertilizer taxes in Austria, Finland, Sweden, and again several
states of the US; and manure charges in Belgium and The Netherlands.^45
The alternative to penalizing farmers through taxation is to encourage them to
adopt non-polluting technologies and practices. This can be done by offering
direct subsidies for adoption of sustainable technologies, and by removing perverse
subsidies that currently encourage polluting activities.^46 An important policy prin-
ciple suggests that it is more efficient to promote practices that do not damage the
environment rather than spending on cleaning up after a problem has been cre-
ated. Many governments provide some direct or indirect public support to their
domestic agricultural and rural sectors. Increasingly, payments are being shifted away
from being production-linked, such as through price support or direct payments, to
being retargeted to support sustainable practices. Generally, though, only small
amounts of total budgets have been put aside for environmental improvements
though such policies as the US Conservation Reserve Programme, the EU’s agri-
environmental and rural development programmes, and the Australian Landcare
programme. Many now believe that all public support for farming should be
entirely linked to the provision of public environmental and social goods.