“We cannot simply rely on a program of pollution abatement in country A [the polluting country] for this would impose costs on A with no offsetting benefits to the polluting country. The OECD’s Polluter-Pays-Principle is thus inconsistent with our insistence on a Pareto improvement. Mutual gains to the countries necessarily require the victim country B to make some payments to A.”

Source: The theory of environmental policy, 1988, pp. 280–281; as cited in Vatn & Bromley (1997)

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William J. Baumol 9
American economist 1922–2017

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