Development of comprehensive liability and compensation regimes are key strategies in the achievement of environmental and sustainable development goals.
Nearly all national environmental liability regimes are based on strict liability (this means that no fault by the polluter is required), when damage is caused by a hazardous activity.
Better prevention and ensuring restoration of environmental damage will result in an increased internalisation of environmental costs, which means that the costs of preventing and restoring environmental damage will be paid by the parties responsible for the damage rather than being financed by society in general (or the tax payer).
International works on liability include the work of the International Law Commission on the development and application of liability regimes under multilateral instruments including the [Antarctic Treaty], the [Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal], and the [Cartagena Protocol on Biosafety].
2. The crucial question is how to equate the environmental risk of an economic activity of a third party with the financial risk of the investor. The importance of legislation to control pollution by requiring industrial remediation or imposing fines is broadly recognized. But beyond the command and control aspects of legislation there is a less acknowledged force: the power of liability. In accordance with the polluter pays principle, present laws hold liable the entity harming the environment but not the financiers to that activity. How, and by what means, might this be changed?