Abstract
The paper presents results of a field study on the feasibility of applying tradable discharge credits approach to wastewater management. The hypothesis that formed the basis of the present study is that conversion of the existing municipal wastewater discharge management system in Lithuania into the one that uses tradable discharge credits can bring both private and overall (social) economic benefits in the form of increased flexibility of the sewerage subscribers to select the most cost-effective means of compliance with the discharge limits. Research has been conducted in order to determine whether the tradable discharge credits can be employed for municipal wastewater management and, if so, how it can be done. The presented framework of wastewater management, based on tradable discharge credits, can serve as a blueprint for similar applications in other countries or regions, as well as a basis for policy steps.
Highlights
Environmental policy instruments are broadly classified into economic and non-economic ones
The abundant theoretical research and application practice show that economic instruments increase the flexibility of environmental management systems, bring substantial cost savings by allowing polluters to determine the most economical ways of meeting environmental policy targets, and offer a permanent incentive to look for cheaper and more efficient ways to comply with environmental regulations
This means that pollution charges set a price for the pollution that leads to a certain pollution level, while tradable permits determine the boundary of pollution that, via market activities, leads to the establishment of the price of pollution
Summary
Environmental policy instruments are broadly classified into economic and non-economic ones. It should be noted that fees for the discharge of BOD5-polluted waters – low they are and limited incentives they might provide – are higher than the pollution charge rates set by the Ministry of Environment for BOD5 emissions directly into water bodies This means that it is cheaper to discharge directly into waterways than to send effluents for treatment to the PWC 6. Analysis of the structure of effluent charges paid by the PWC for the discharge of wastewater into the river Nevėžis reveals that fees for BOD5 emissions comprised just about 15% of total charge payments This observation indicates that the PWC could be interested in revising the present wastewater management system to include the remaining eight controlled pollutants into its tariff schedule. Responsibilities in the monitoring of discharges, verification of credit creation, and registration of trades
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