Economic instruments for water conservation: Charging for water use and the Pigouvian tax for mitigating water pollution

Abstract

This paper presents an analysis of the economic instruments applied to water conservation, with a focus on charging for water use and the Pigouvian tax, and also addresses the synergistic integration of these instruments with other water management policies, involving a holistic approach to water conservation. In addition, the challenges in implementing these mechanisms are discussed, including political resistance and issues of social constraints. Methodologically, an interdisciplinary approach was adopted, combined with quantitative and qualitative analysis, followed by evaluation and representative case studies from different geographical and economic contexts. It is clear that the understanding and application of economic instruments in water conservation provides a robust theoretical framework and empirical evidence to support the effectiveness of charging for water use and the Pigouvian tax, which is crucial for promoting sustainable water resource management and mitigating water pollution on a global scale. In Brazil, charging for water use plays a crucial role in promoting the sustainable management of water resources, in line with principles of equity, efficiency and socio-environmental responsibility. However, its effectiveness depends on integration with other management strategies and the active involvement of all sectors of society.