Environmental Crime

Environmental CrimeGiuseppe Di Vita*Department of Economics and Business,University of Catania,Catania,ItalyAbstractTo study environmental crime in a perspective of law and economics,it is necessary to identify the protected species from an economic point of view and at the same time to give a legal definition of this kind of criminal behavior.The list of sanctions and their effective deterrence effects in cases of environmental crime are addressed in thefinal part of this essay.DefinitionEnvironmental crime is a behavior harmful for the natural environment and its population that is punished with criminal sanctions,according to the nature of the protected species and the type and magnitude of present and future damage.Environmental CrimeInterdisciplinary issues are hard to approach because they involve different kinds of knowledge with the use of specific terminology;this is particularly true in the case of environmental crime.The analysis moves from the concept of environment as the object of legislative protection and then follows with the definition of environmental crime.This is not an easy task because even within the legal doctrine there is no unanimous view of the concept of environmental crime,and technical language is not the same for lawyers and economists.The analysis follows with a list of the criminal sanctions that may be applied as a consequence of public enforcement of criminal environmental law against the violators of such rules.In conclusion,the deterrence effects of criminal sanctions are studied in practice,considering the results of empirical studies performed.(See Gray and Shimshack (2011)for a recent survey of the literature on empirical analysis on enforcement of criminal sanctions).EnvironmentFrom the economic point of view,we should define the interest protected by the law and the reasons why the policy maker(or legislator)chooses to punish illegal behavior against the environment by applying criminal sanctions.The problem of an optimal use of the environment and its protection originates from its nature of public good(Siebert1992)and its characteristics of non-excludability and non-rivalry.The inability of the market to determine an equilibrium price may be due to the social costs associated with the *Email:gdivita@lex.unict.itprivate use of the good(as in the case of pollution emissions),or the collective nature of the benefits, that make the excludability cost extremely high and the price market equal to zero(e.g.,the case of biodiversity preservation).In thefirst case the self-interest of individuals determines an exploitation of the environment,while in the second hypothesis the indivisibility of the benefits makes the individuals unwilling to pay for this kind of good.Whenever the existence of a source of market failure is present,the market produces an inefficient allocation of resources(Bator1958),thus rendering necessary the adoption of some economic and legal policy,to bring the system as close as possible to a situation of Pareto-optimal market allocation.A wide spectrum exists of possible measures that it is possible to implement in order to correct the inefficiencies of the market,such as Pigouvian taxes,standards,tradable permits,Coasian solution,and creation of an institution(Faure 2012;Tietenberg and Lewis2012).This study considers only the cases where the inefficient allocation of environmental assets is punished by means of criminal sanctions.The main reason for committing a crime against the environment is the saving gained by avoiding a costly compliance to the regulation implemented,adopted with the aim of preserving the environment.The individuals who follow their self-interest,thereby breaking the environmental law,worsen social welfare,over-exploiting the environment with irreversible harm for future generations.The economic benefits for violators increase according to the degree of stringency of the legislation(Almer and Goeschl2013).From the legislative and court point of view,the kind of remedy is commensurate with the gravity of the behavior to the environment(Rousseau2009).So the private remedies of repayment for damage or injunction are confined to the less important cases where the consequences of illegal behavior are limited to the parties involved(e.g.,the noise in a private apartment).The sources of market failures render the use of standard civil remedies difficult(like using the strict liability regimes,see Sigman2010)and the administrativefines inadequate.In the case of private goods,it is sufficient to design the property rights properly in order to bring the system to the optimal path,allowing the victim of damage tofile the case in the court and to be reimbursed for the damage,thus indirectly promoting the private enforcement of environmental law. This efficient mechanism cannot be used in the case of public goods because of the incomplete appropriability of the benefits and the multiple offensive environmental damages that go beyond the individual dimension and involve collective values and the welfare of future generations.To protect environmental goods like air,soil,and water,it is necessary to adopt policies promoting the use of devices to abate the level of pollution and/or to implement more environmental friendly technologies together with other measures to preserve biodiversity and to avoid climate changes, domestic and trans-boundary pollution,illegal waste disposal in landfill,pollution emissions,and so on.Often,such kinds of good cannot be efficiently protected by using the standard private law remedies(like injunction to avoid future damages and the condemnation of the author of the offense to pay past damages),in consideration of their characteristic as public good,requiring stronger measures from the policy maker,like a public enforcement of the law,that may only indirectly protect the private rights involved.(About the“civil enforcement tools”of environmental law,see: Glicksman and Earnhart2007).Environmental CrimeThe“enforcement pyramid”(Ayres and Braithwaite1995),i.e.,the graduation of penalties for illegal behavior that could be applied to protect the environment,is made up of civil sanctions,adminis-trativefines,and criminal sanctions.Although all the kinds of sanctions have as commondenominator the protection of the environment by means of punishment of the violator andreimbursement of the damage,thefirst two kinds of enforcement of environmental law have astheir principal aim to deter the violator and compensate the offended individuals,in contrast with thecriminal sanctions that have as their main goal to punish the violator.Among the civil sanctions to implement environmental law,the“citizen’s suit”deserves a specialmention;it may be defined thus“...Citizen suits are court proceedings brought by citizens who seekto enforce public rights.In the environmental arena they are cases brought to enforce the rights orobligations created by environmental laws.They are civil as opposed to criminal cases.Whilecitizens’suits are often brought against government authorities this is not a definitive feature...”(Mossop1993).This measure to implement environmental law has been extensively used in wealthy(Naysnerski and Tietenberg1992)and less developed countries,precisely since1958in the CzechRepublic(Earnhart2000).This kind of law enforcement is based on the citizens’cooperation toprotect the environment and may be useful in minor cases of law infringement.(Regarding theeffects of alternative policies increasing reliance of self-reporting by polluters,see Farmer2007).The step immediately next to thefirst in the enforcement pyramid consists of the administrative fines that may be applied without any judge’s intervention;their implementation is devoted to public bodies of the state.The problem is that the dissuasive capability of administrative sanctions could beinefficient to punish and deter the more dangerous behavior to the environment.(See on the optimallevel of environmentalfines the interesting paper by Rousseau and Kjetil2010).In general,it is possible to note that criminal proceedings are,in contrast to civil proceedings,initiated by the government or by public authorities rather than offended individuals.This kind ofpublic enforcement of environmental law requires a high standard of proof,involving fundamentalindividual rights constitutionally protected(like individual freedom)and moral-social stigmaconsequent to an application of a criminal sanction.The environmental crime may be defined from the legal point of view as a crime against theenvironment or the violation of an environmental law(Clifford and Edwards1998).(Clifford andEdwards(1998)moreover propose a broad philosophical definition of an“environmental crime”asan act committed with the intent to harm or with a potential to cause harm to ecological and/orbiological system and for the purpose of securing business or personal advantage.See Emanet al.(2013)for an updated survey of the definition of“environmental crimes”in general and withinthe European Union.For a criminological analysis of environmental crime,see Huisman and VanErp2013and Lynch and Stretesky2014).Although from the legislative point of view it is simple to say what is an environmental crime,among the international community of law scholars,there is no unanimous definition of this concept;nevertheless the phrase“environmental crime”is used in several international agreements andnational legislation.Here we may underline the increasing relevance of the trans-boundary dimension of environ-mental protection(e.g.,air,waste,water,global warming:green crimes include air pollution,waterpollution,deforestation,species decline,the dumping of hazardous waste,etc.).This indicates theneed for the international community to define this concept univocally.The main obstacle to this aimis that the identification of environmental goods protected by criminal sanctions depends on thesocioeconomic condition of each single country.So you may expect countries at the same stage ofdevelopment to be more prone to adopt similar or identical legislation and enforcement systems,because their relationship between per capita income and pollution is the same.(About therelationship between per capita income and polluting emissions and the relevance of legal familyin explaining the environmental quality levels at different stages of growth,see Di Vita(2008).)Developing countries are not able to use their scarce resources to protect the environment fully.These considerations could be of help in explaining why the delimitation of environmental crime differs among countries.Criminal sanctions for violation of environmental law constitute a novelty introduced in the1980s of the last century,with an increasing incidence in recent years(Billiet and Rousseau2014;Goeschl and J€u rgens2014).Since the1970s criminal sanctions to protect the environment have become a measure extensively used in the United States and later on in the European Community(Almer and Goeschl2010).(For an updated survey of“environmental crime”within the European Union,see Öberg(2013).)In the European Union the criminalization of environmental law enforcement has been strengthened by the European Directive2008/99/EC(Billiet and Rousseau2014).More recently,since the mid1990s,some European countries have introduced administrative sanctions as a complement of criminalfines(Faure and Svatikova2012;Faure2012).Administrative measures have the advantage of being moreflexible than criminal proceedings so that the enforce-ment of environmental law may be pursued at lower cost.Even in the former Eastern European countries,the environmental laws are beginning to be protected by the introduction of criminal sanctions(Eman et al.2013).Australia is a country where the protection of the environment by means of criminal sanctions has a long tradition and since1979has played a leading role in criminal justice processing of environ-mental offenses through the New South Wales Land and Environment,being probably thefirst nation to introduce environmental courts(Walters and Westerhuis2013).Among the so-called BRICS countries,Russia seems to have experienced a reduction of crimes against the environment (according to domestic statistics),although some people suggest that together with a decrease in ecological crimes and offenses,there is some increase of latency within thefield of ecological crime. Recent research suggests that one of the major profiles of environmental crime counteraction could be the non-governmental ecological control system development adopted in Russia that is devolved to both municipal and social ecological control.This raises some doubt about the degree of enforcement necessary to achieve the optimal level of environmental protection(Anisimov et al.2013).Even China,one of the most dynamic economies among the developing countries,has recently levied criminal sanctions to punish violators and deter future infringements of environmental law (Zong and Liao2012).In the African continent protection of the environment from criminals is not so widespread for the economic considerations discussed previously.Nevertheless this may repre-sent a missed opportunity to preserve one of the largest green lungs of the world and an inexhaustible source of biodiversity.The key point of view to consider the importance of environmental crime is the dynamic effects of this kind of sanction in bringing the economic systems toward a more sustainable path to preserve the environment and render the stock of environment useful for future generations. Criminal Sanctions to Punish and Prevent Behavior Harmful to the EnvironmentBased on the previous considerations,it is clear that the state has to choose whether to punish some illegal behavior with a criminal sanction in consideration of the interest protected and the offensive magnitude of present and future damages.In the case of civil remedies to enforce the environmental law,the costs burden on citizens,with limited expenses for the public sector of the economy(state administration and its ramifications).The criminal sanctions are applied because it is assumed that they raise the level of environmental protection,with high costs to the public sector of economy interms of investigation and imposition of penalties.The enforcement costs are relevant under binding budget constraint.Shavell(1985,1987)has indentifiedfive conditions that should be fulfilled to justify the application of non-monetary sanctions for efficient criminal deterrence.Such conditions are(i)the probability of insolvency of the violator,(ii)the possibility that the criminal is able to avoid paying the monetary sanction,(iii)the illicit earnings for the private agent in infringing the environmental criminal law,(iv)the potential future damage to the environment,and(v)the magnitude of the damage.His conclusion is that the criminal sanctions are worth applying only when thesefive conditions are strong enough to outweigh the social costs to deter,punish,and hold in jail the authors of environmental crimes(Billiet and Rousseau2014).In a general theoretic framework,Emons(2003,2007)found evidence that criminal sanctions should be applied in case of repeat offenders,punishing the less harmful violation of the law with monetary penalties;escalating penalties are used not to make the criminal career less attractive but to make being honest more attractive.Despite these theoreticalfindings,the empirical question is whether the use of escalating sanctions based on offense history is valid when the benefit of crime and the probability of apprehension are high.The recent guidelines of US sentences suggest inflicting a short period of imprisonment when the environmental crime leads to severe damage(e.g.,an illegal dump of waste,river pollution,etc.).In accordance with previous theoreticalfindings,O’Hear(2004)reports that in Australia the prison sentences for environmental crime have been limited to the most serious offenses to the environment.The sanction for a criminal defendant varies according to the crime and includes such measures as the sanction of death,not applicable in cases of environmental law infringement.Incarceration is a period of time that the violator spends in jail,as a consequence of a criminal sentence.Probation is the period during which a person,“the probationer,”is subject to critical examination and evalua-tion.It is a trial period that must be completed before a person receives greater benefits or freedom. (The probationer criminal sanction could be considered quite similar to the suspended sentences that have a lower immediate effect but tend to deter future criminal behavior(Billiet and Rousseau 2014).)Community service is the period of time that the convicted spends doing civil services instead of jail or at the end of the period of imprisonment.Finally,monetaryfines are monetary sanctions applied by the courts as a conclusion of a criminal proceeding(for a more complete explanation of the characteristics of criminal sanctions,seeÖberg2013).Deterrence Effects of Criminal SanctionsIn the introduction we assume that the criminal sanctions are applied in cases of extremely offensive behavior toward the environment.The underground message is that criminal sanctions possess the greatest deterrence capacity,to dissuade further environmental damage.The axiom that criminali-zation raises the level of environmental quality has been questioned several times(Stigler1970; Polinsky1980;Andreoni1991;Heyes1996),in consideration of greater costs for the use of criminal sanctions and the negative substitute effects on civil and administrativefines.Recently Goeschl and J€u rgens(2014),moving from the initiatives of the European Commission to prevent environmental crimes,have shown that an increase in the criminalization level does not necessarily lead to higher environmental quality.The greater the area of criminal responsibility for environmental law violation,the lower will be the enforcement by using alternative measures. Based on these considerations the debate is shifted into the arena of applied studies.Cherry’s(2001)empirical analysis found strong empirical evidence thatfinancial penalties have adeterrence effect stronger than prison sentences and that monetary sanctions imply a lower socialcost to punish those responsible for crimes and to prevent future damages.The limitation of Cherry’sstudy is that crimes against the environment are not considered but illegal behavior in general.Faure and Heine(2005),in their research on the enforcement of environmental crimes in Europe,find that monetary sanctions are more widespread than criminal sanctions in the Old Continent. Almer and Goelschl(2010)found a positive relationship between environmental crime prosecutionand the deterrence effect.This result is reinforced by the outcomes of another empirical studyconducted,using microeconomic data,in Germany regarding in particular waste crimes,wherepersecutors faced inelasticity of4%of resources devoted to environmental offices in response to aunitary increase in environmental crimes(Almer and Goeschl2011).Faure and Svatikova(2012)performed an empirical analysis on the effects of criminal sanctiondeterrence of illegal behavior against the environment when the penalty is used together with theadministrative process to enforce environmental law.Their analysis is based on the theoreticalassumption that to enforce environmental law,having a budget constraint,it is more efficient to useadministrativefines,instead of criminal sanctions,because they are moreflexible and cheaper thancriminal proceedings.Their evidence,based on a dataset available for four Western Europe nations(Fleming Region,Germany,Netherland,and the United Kingdom),shows that administrativefines are a cheapercomplement of criminal sanctions.Billiet and Rousseau(2014)suggest that the relationship between monetary and non-monetarysanctions is in complementary and not alternative terms.(For an empirical analysis performed onmicrodata regarding penalties applied by courts in Europe,see Billiet et al.2014.)In their empiricalresearch they found that thefines are usually applied together with other criminal sanctions,thusconfirming the complementary nature of the different kinds of criminal sanctions.Billiet and Rousseau(2014)investigated how prison sentences for environmental crime effectsare used in fact and their deterrence effects to violators in Flanders,using statistics of seven Courts ofFirst Instance and the Court of Appeal of Ghent,regarding the complete case law from2003to2007.This empirical analysis confirms that in the EU,countries like Belgium,in87.49%of criminalproceedings,only afine sanction was applied to individual violators.These scholars in theirinteresting study found that the kind of environmental problem does not matter(Billiet andRousseau2014)and that prison sentences are not always executed.(Rousseau(2009)performedan interesting empirical analysis of the court sentences in proceedings regarding environmentalcrime,finding that judges protect the private assets and calculate the sanctions in consideration of themagnitude of the harm).Almer and Goeschl(2013)performed an empirical analysis on a special kind of environmentalcrime regarding waste,considering a panel dataset of44counties from the German state of Baden-W€u rttemberg between1995and2005.Their outcomes support the theoretical assumption thatcriminal sanctions have a greater deterrence effect,although the magnitude of this effect dependson the intensity of enforcement.Moreover,the economic conditions and policy measures adopted atjurisdiction level play a significant role to explain why similar law infringements seem to beevaluated and punished in different ways.The deterrence effect of criminal sanctions to punish the violators of environmental law seems tobe a promisingfield of future research,to draw guidelines for further legislative measures.Cross-References▶Commons,Anticommons and Semicommons▶Externalities▶Incomplete Property RightsReferencesAlmer C,Goeschl T(2010)Environmental crime and punishment:empirical evidence from the German penal nd Econ86(4):707–726Almer C,Goeschl T(2011)The political economy of the environmental criminal justice system: a production function approach.Public Choice148:611–630Almer T,Goeschl T(2013)The Sopranos redux:the empirical economics of waste crime.Reg Stud (forthcoming)Andreoni J(1991)Reasonable doubt and the optimal magnitude offines:should the penaltyfit the crime?RAND J Econ22(3):385–395Anisimov AP,Aleksseva AP,Melihov AI(2013)Current issues of ecological crime counteraction in Russia.Criminol J Baikal Natl Univ Econ Law3:80–89Ayres I,Braithwaite J(1995)Responsive regulation:transcending the deregulation debate.Oxford University Press,OxfordBator FM(1958)The anatomy of market failure.Q J Econ72(3):351–379Billiet CM,Rousseau S(2014)How real is the threat of imprisonment for environmental crime?Eur J Law Econ37(2):183–198Billiet CM,Blondiau T,Rousseau S(2014)Punishing environmental crimes:an empirical study from lower courts to the court of appeal.Regul Gov8(4):472–496Cherry TD(2001)Financial penalties as an alternative criminal sanction:evidence from panel data. 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