For a long time, the command-and-control approach has been in used in the Philippines as evidenced by the decreed minimum parameter for the acidity level of fresh waters. Its major tool, the setting of standards, has indeed been popular due to its simplicity and specificity. Are these effective? This Policy Notes gives an answer.natural resources and environment, environmental issues, environmental management

Elazegui, Dulce D.

English

Research Papers in Economics

No. 2002-03 April 2002
Dulce D. Elazegui*
Policy Notes
Setting Quality Standards
for Environmental
Management Policy:
How Effective Is It?
I I
PHILIPPINE INSTITUTE
FOR DEVELOPMENT STUDIES
Surian sa mga Pag-aaral
Pangkaunlaran ng Pilipinas
25
1977 1977
2002 2002
n the face of continuing environmental degrada-
tion in the country brought about by, among oth-
ers, urbanization and industrialization, it is im-
portant to ask what has been done in terms of
adopting a policy to address such degradation and as-
sess how effective that policy has been in achieving its
objective.
In the Philippines, the approach adopted in its envi-
ronmental management policy is reflected in the various
legislation passed through the years, attempting to ar-
rest the damage inflicted on the country's environment
and natural resources. Decrees such as the National
Pollution Control Decree of 1976, Toxic Substances and
Hazardous and Nuclear Wastes Control Act of 1990, Phil-
ippine Mining Act of 1995, and Philippine Clear Air Act of
1999 share a common characteristic. They are all based
on the command-and-control principle in environmental
management whereby standards are set or established
to protect or improve environmental quality.
Command-and-control principle
in environmental management
Basically, the command-and-control approach1 in-
volves the enactment of a law to bring about a behavior
and the use of an enforcement machinery to get people
to obey the law. The tools used in the command-and-
control approach are the environmental quality standards,
an example of which is the decreed minimum parameter
for the acidity level of fresh waters (class AA) at 6.5–8.5
pH per DENR Administrative Order No. 34 repealing the
National Pollution Act.
__________
*The author is a University Extension Specialist at the Institute of
Strategic Planning and Policy Studies (ISPPS) of the University of the
Philippines at Los Baños.
1Please refer to PIDS Economic Issue of the Day Vol. III No. 1,
April 2002 issue on "A law of nature: The command-and-control
approach" for an explanation of this concept.
PIDS Policy Notes are observations/analyses written by PIDS
researchers on certain policy issues. The treatise is holistic in approach
and aims to provide useful inputs for decisionmaking.
This Notes is based on a policy paper written by Ms. Elazegui for
the workplan entitled "Policy analysis for environmental management
planning" under the Sustainable Agriculture and Natural Resource Man-
agement Collaborative Research Support Program for Southeast Asia
(SANREM-CRSP/SEA). Ms. Jennifer P.T. Liguton helped in recasting
and repackaging said paper for this Notes. The views expressed are
those of the author and do not necessarily reflect those of PIDS,
SANREM-CRSP/SEA or any of the study's sponsors.2 April 2002
Policy Notes
For a long time, this approach has been used in
the Philippines. And its major tool or instrument—the
setting of standards—has indeed been and is still popu-
lar since standards appear simple and specific in tar-
gets. The question, however, is: Are they also effective?
Emerging concerns on environment standards
There are a number of factors that contribute to
the success or failure of environmental policy. Among
them are the question of ef-
ficiency and cost effective-
ness, equity considerations,
and enforceability.
Standards may indeed
look simple and specific at
first glance but as one goes
through the political and ad-
ministrative process of
implementing them, one
discovers that there are several complications and prob-
lems that have to be addressed. These relate to the set-
ting of the level of standards, uniformity of standards,
equity effects, and enforcement.
All-or-nothing quality
In the setting of standards, the principle seems to
reflect an "all-or-nothing" quality. Either the standard is
met or not; the cost involved is not considered. For in-
stance, setting ambient or emission standards generally
considers only damage cost, not abatement cost. Bal-
ancing marginal abatement cost and marginal damage
cost or minimizing abatement cost vis-à-vis damage in
order to achieve efficiency is not taken into account.
At the same time, standards are considered as
threshold levels where risks involved are at the minimum.
However, these "safe" levels may not hold true in all
cases as toxicologists and other scientists claim that
there is no threshold for many environmental pollutants.
The standards imposed by law may be safe for some
individuals but not for others because of varying reac-
tions of human or habitat to pollutants. To shield every-
thing from diverse effects means targeting for a zero-risk
level or setting the standard level of emission at zero.
This, understandably, is not quite a realistic goal.
Standards may indeed look simple and specific at first
glance but as one goes through the political and
administrative process of implementing them, one
discovers that there are several complications and
problems that have to be addressed.
Uniformity in heterogeneity
A single, uniform standard is also usually imposed
for nationwide application. But in reality, regions or areas
have heterogeneous situations such that the costs of
damage will expectedly differ. The same level of emis-
sion may affect more people
and economic activities in a
more developed area than
in a less developed one. A
uniform standard could thus
be relatively stringent in less
affected areas than in more
affected areas. Standards
should, therefore, conform
to situations appropriate to
an area.
Equity in multiplicity
Pollution emanates from multiple sources. Ideally,
it would be efficient if the standard level of emission is
achieved at the minimum marginal cost of abatement.
With the underlying 'equimarginal principle' of the com-
mand-and-control approach, the different polluters, regard-
less of size or performance, will have to pay the same
compliance cost to meet a uniform standard emission.
However, the cost of abatement varies in reality across
polluters based on their economic and technological con-
ditions. The greater the variation, the more difficult it is
to attain the equimarginal principle of the uniform stan-
dard approach.
The setting of source-specific emission standards
would thus be more appropriate as long as the polluters
would be willing to share information on their actual abate-
ment costs to establish individual emission standards.
Paradox of enforcement
Pollution control laws are useless if not enforced
nor supported with resources. Standards are often for-3 No. 2002-03
Policy Notes
mulated by national authorities but enforced by local au-
thorities. In formulating the standards, the cost of en-
forcement may not usually be thoroughly considered, leav-
ing local authorities with the financial burden. Because
of limited funds, local enforcers may thus resort to com-
promises or deals with the firms concerned at times.
Strictness of standards often suggests higher en-
forcement costs. Sanctions for violators are usually in
the form of fines or imprisonment. If fines are too low,
offenders may opt to pay the fine than spend for abate-
ment measures. Higher penalty may motivate compliance
but extremely high fines could encourage authorities to
make this an avenue for income generation, distorting
the litigation process.
Sustainability of enforcement is also another con-
cern. Initially, compliance with standards may be high
but if monitoring is not sustained through time, continu-
ous compliance may not be assured. Effectiveness of
the standards approach depends on time, effort and
money invested in enforcement.
Policy option
As shown above, standards set under the command-
and-control approach have a number of limitations, in
particular, in terms of incentive offered to polluters in
compliance with environment standards.
The abovementioned approach with its set stan-
dards is like a "one-size-fits-all" approach (World Bank
2000) that does not categorically consider varying per-
formances of polluters, thereby ignoring the efficiency
principle.
In this regard, one option for policy that may be
considered is an incentive-based strategy or the "polluter
pays" principle2 where emission charges or taxes are
estimated according to the level of emission. This kind
of approach was adopted by the Laguna Lake Develop-
ment Authority (LLDA) in the 1990s and within two years,
the level of biochemical oxygen demand (BOD) discharges
from the industrial plants initially covered in the early
stage of implementation declined by 88 percent.
Because of the proportionate charges involved, in-
centive-based strategies like the polluter pays principle
motivate polluters to be more cautious of their emission
levels. They also provide stronger economic incentive to
polluters to clean up, using their own chosen strategy.
Pollution taxes or charges encourage polluters to search
for innovations—management or technological—that will
reduce emission rates at the least cost.
____________
2Refer to PIDS Economic Issue of the Day Vol. II No. 3, December
2001 issue.
Laguna de Bay4 April 2002
Policy Notes
For further information, please contact
The Research Information Staff
Philippine Institute for Development Studies
NEDA sa Makati Building, 106 Amorsolo Street
Legaspi Village, Makati City
Telephone Nos: 8924059 and 8935705;
Fax Nos: 8939589 and 8161091
E-mail: jliguton@pidsnet.pids.gov.ph
The Policy Notes series is available online at
http://www.pids.gov.ph
SANREM–CRSP/SEA is a research, training and information exchange program that adopts
the landscape–lifescape development approach to food production and natural resource
management. It is funded by the Office of Agriculture and Food Security, Bureau for
Global Programs of the United States Agency for International Aid (USAID).
For further inquiry on the workplan from which this Policy Notes is based,
please contact the workplan's principal investigators:
Dr. Ian Coxhead – coxhead@facstaff.wisc.edu or http://aae.wisc.edu.coxhead
Dr. Agnes C. Rola – arola@laguna.net
Meanwhile, regulation—whether standards or taxes
and charges—and enforcement are important in environ-
mental management. However, environmental policies
should systematically suit local circumstances such as
the pollution load, size of the exposed population and
income, and simultaneously consider both benefits and
costs of pollution control. Effective enforcement also de-
pends on the community's capacity to respond to envi-
ronment problems; thus, the importance of information,
education and bargaining power cannot be overempha-
sized. Regulatory policies will only gain leverage there-
fore if programs to inform and educate the communities
are also in place.  4 4
References
Environmental Management Bureau. 1996. Philippine environmental
quality report 1990-1995. Department of Environment and Natu-
ral Resources.
Field, B.C. 1994. Environmental economics: an introduction. McGraw-
Hill Inc.
World Bank. 2000. Greening industry: new roles for communities, mar-
kets and governments. Development Research Group, World Bank.
Oxford University Press.
Virola, R., S. de Perio and E. Angeles. 2000. Environmental account-
ing in the Philippines. National Statistical Coordination Board-
United Nations Development Programme.

Environmental accounting in the Philippines. National Statistical Coordination BoardUnited Nations Development Programme.

Environmental economics: an introduction.

Greening industry: new roles for communities, markets and governments. Development Research Group, World Bank.

Philippine environmental quality report 1990-1995. Department of Environment and Natural Resources.

Setting Quality Standards for Environmental Management Policy: How Effective Is It?

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