Economic analysis of alternative pollution abatement policies: the case of Buriganga River, Bangladesh

Abstract

The Buriganga River is a prime example of serious surface water pollution problem. So far the emphasis of pollution abatement policy for this river has been solely on the application of command and control (CAC) mechanisms (standards on emission discharges), however little success has been achieved as the polluters seem to be reluctant to comply to these measures. This study evaluates the existing system for pollution control in this particular river and determines the economic costs that are likely to result under alternative policy instruments for pollution abatement, such as, uniform reduction, taxes and tradable permit system. The results from the simulation exercise show that application of the approaches based on economic incentives (taxes or tradable permit systems) could achieve significant cost savings for pollution abatement compared to the command and control-based approach (uniform reduction system).