The Role of the Ecological Fiscal Transfers for Water Conservation Policies

Abstract

The purpose of this chapter is to fill the lacuna found in the literature with regard to describing the role of EFTs for water conservation policies. The literature tells us that ecological fiscal transfers (EFTs) are analysed so to pursue biodiversity conservation policies and solid waste management (SWM). For biodiversity conservation policies, EFTs have two purposes: (1) to incentivize municipalities to create local protected areas (PA); and (2) to compensate municipalities for corresponding land-use restrictions. In the case of SWM, the main idea is that, even considering the fees paid by the households, it is still costly to maintain waste services in the municipal territories. In this context, EFTs are appealing policy instrument to help local governments create landfills or composting plants. However, in Brazil EFTs are functioning as a policy instrument which also includes a wide range of policy domains, such as water conservation, indigenous land, fire-control, and so on. Six states adopted EFTs specifically for water conservation policies: Goias, Parana, Pernambuco, Piaui, Rio de Janeiro, and Tocantins. Descriptive analyses, focusing on legislative differences are conducted for each of these states.