Effluent Charges Research Articles

Interactive pollutants and joint abatement costs: Achieving water quality standards with effluent charges

This paper extends earlier work on the standards and prices approach to pollution control by considering simultaneously spatial considerations, interactive pollutants, and joint abatement costs. The form of environmental constraints appropriate to water pollution problems is discussed in detail and the implications for the standards and prices approach to water pollution control are assessed. The presence of interactive pollutants and joint abatement costs is shown to have important implications for both the theoretical properties and the implementation of the standards and prices approach.

An effluent charge schedule: Cost, financial burden, and punitive effects

Alternative effluent charge programs are examined with regard to cost, charge payments, financial burden, and punitive effects. These efficiency and equity issues are evaluated for constant unit charge programs and for effluent charge schedule programs; the latter are found to reduce the charge payments and the financial burden significantly. Example charge schedule solutions are also shown to compare favorably to the corresponding direct regulation solutions.

The Welfare Loss of an Input Market Distortion: The Case of Sewer Effluent Charges

Many economists have proposed the use of pure effluent charges to solve environmental pollution problems. This charge is levied by an environmental authority, or other government agency, on each unit of waste emissions to the environment by a polluting entity. In theory, this will induce a cost minimizing, polluting firm to reduce its pollution emissions. The purpose of this paper is to present some evidence regarding an input market distortion induced by one form of such a charge, as well as to measure the resulting welfare loss. While there are no pure effluent charge schemes per se currently in use in North America, various jurisdictions have imposed a type of effluent charge against emissions to the sanitary sewer system.2 This levy may be referred to as a sewer effluent charge. In addition to inducing pollution abatement, these charges, as currently administered in most North American jurisdictions, also introduce an input market distortion not present under a pure effluent charge scheme. This distortion occurs in the

Water recovery systems for processing dairies

The paper discusses the need for research into the possibilities of recovering, purifying and recycling waste waters in view of the costs of water purchase and effluent charges. The latest systems and installations to date are described and the importance of the purity of recycled waters stressed. EEC legislation and Standards, also recommendations as set out by the World Health Organization are given and tables included showing water recovery systems.

Taxing consumption to finance reduced emissions : An alternative pollution control

The alternative of direct governmental control of pollution caused by production, financed by taxes on the good that is produced is compared to the system of effluent charges. The former is found to be superior in some cases. The case of random demand for output is also discussed.

International Comparison of Trends in Water Resources Management, An

Current problems involving water use and efforts to develop a legal framework to cope with the rising demand for water are surveyed. A comparison is made of legal steps taken by several countries to encourage efficienct water use. Recent trends in water management are shown to be in the direction of conservation, recovery, and reuse and are associated with available technology. Centralization of water resource management allows the best mechanism for monitoring use and consolidating the administrative structure so that regulations are resource- rather than use-oriented. This will allow a smooth transition from the old wasteful water rights laws and make the transfer of water from one place or use to another less constrained. Pricing has been found to be an effective conservation tool for reducing water use, while effluent charges promote recovery and reuse.

An “effluent” charge approach to aircraft noise abatement

This paper is concerned with the control of aircraft noise. Some brief remarks are made on the relationship of aircraft noise problems to the theoretical approaches to externalities. We note in particular that an effluent charge is the most practical way to deal with the problem. A linear programming technique is used to find the bundle of noise-reducing options that minimizes the cost of achieving noise reduction goals, given an upper limit on service reduction. A rate-of-return criterion is imposed on the l.p. solution. Shadow prices are used to generate charges on the airlines. This provides a stimulus for abatement without dictating actual methods. Implicit in the cost parameters are prices of aircraft fuel. We assess the attractiveness of the abatement options with increasing fuel prices. The mechanics of the actual implementation of the charge in the airline industry is examined. We conclude that the institution of a plan such as the one proposed here will provide control of aircraft noise in a socially efficient manner.

Pigouvian policies in closed behavioral systems

This essay-analyzes the Pigouvian tax-subsidy policy, reviews the traditional justification and several practical and theoretical criticisms of it, and offers three arguments about the Pigouvian policy and the implied structure of effluent charges (as well as subsidies). First, many proponents of a Pigouvian policy misinterpret its purpose. The tax is not designed to reduce pollution to an ‘acceptable’ level, but to maximize joint production value. Second, Pigouvian effluent charges may violate some constructions of the equal protection clause. Third, these charges may violate, also, some constructions of the due process clause, as well as the ethical criteria that the right of due process implies.

Analysis of differences in municipal treatment levels

Effluent charges are often proposed as the best way to insure that environmental costs will be internalized by the discharger. However, even in the absence of such charges, municipal treatment plants have been constructed for many years, an indication that to a significant degree, states and communities have internalized the pollution costs of waste water discharges. The motivation for such investment varies widely, however, since before secondary treatment became a Federal requirement the percentage of the sewered population in a state receiving such treatment ranged from 9 in New Hampshire to 100 in New Mexico. Using regression techniques, this analysis explains 40–45% of the variation in treatment levels among states in 1968 in terms of factors such as the availability of assimilative capacity relative to waste loads and the recency of urban development. The results of state and local programs appear to have been rational, broadly speaking, more extensive treatment being applied where pollution impacts would be greater. Some of the economic implications of the construction grant program, which provides an added incentive for treatment plant investment, are discussed in the light of these results.

Standard Setting and the Theory of Institutional Choice: The Case of Pollution Control

The argument presented by Majone in a recent article in Policy and Politics may be summarized thus: By all objective criteria effluent charges can be shown to be superior to other policies for controlling discharges to waterways, yet there is a reluctance among policy makers to their usage. He concludes that since it is unreasonable to assume that policy makers are stupid, or blindly prejudiced, the only possible explanation is that the self-interest of the politician or bureaucrat must be interfering with his objectivity. It is not the purpose of this note to assert that politicians or bureaucrats are always concerned to maximize public welfare, however defined, or – to use Breton’s phrase – to ‘minimize the degree of coercion.’ Instead, it is intended to outline the pitfalls of an approach which justifies unequivocably a policy and proceeds to conclude that because of its non-introduction legislators are pursuing antisocial objectives. Specifically, the balance of the effluent charge versus the standards approach will be redressed. Majone states that effluent charges are an efficient method of achieving a specified water quality, but that the restriction of quantities discharged in physical form (by the ‘consent’ system in the U.K. context) requires information too costly to be collected.

Converting wastes to raw materials

Because of its international structure, N.V. Philips has established a system of international cooperation to ensure that its antipollution measures and procedures are fully implemented and coordinated throughout the company. The overall aims are to prevent pollution and to minimize waste products. There is close liaison with local, regional, national, and international authorities concerning standards and specifications. A number of new process techniques and plant modifications for redesigns are presented as examples of Philips' efforts in this area. Some process modifications yielded immediate financial advantage even when the costs in the old situation were compared directly to those in the new; others proved slightly more costly in the new situation, but are still more financially attractive in relation to the capital costs involved in wastewater treatment and effluent charges. Philips tries to prevent pollution by modifying or designing processes to give zero pollution; where this cannot be achieved, the company attempts to minimize its pollution and contain it in-plant; all waste products are purified and the ensuing pollution, if any, kept to minimal levels. Reuse, regeneration to raw or auxiliary materials, and the supply of regenerated substances as raw materials are examples of the residual value of wastes. The preparationmore » of a materials balance sheet for raw and auxiliary materials helps increase knowledge of the environmental consequences of a new process or the production of a new product.« less

Estimating an Effluent Charge: The Reserve Mining Case

The case is examined for charging Reserve Mining Corporation for discharging mine tailings into Lake Superior. The effluent appears to be contributing to the lake's increasing eutrophication and its contamination by carcinogenic asbestos-form fibers. An effluent charge against the company is presented as an alternative to action recommended by the courts. Following a review of the scientific evidence, estimates of social costs are developed as a base for effluent charges. Imposition of these charges will result in long-range positive environmental impacts both by having the revenues used for water filtration, water treatment research, and related health care or as an inducement to manufacturers to try other ways of handling their discharge. Although abatement strategies appear to be more costly than effluent charges based on damages, the choice may be made to pay the price for an environment with higher quality and less risk. If charges are made high enough, i.e., comparable to abatement costs, industries will have adequate incentives to reduce their discharges. 40 refs. (DCK)

Effluent charges could reduce water pollution

Effluent charges could reduce water pollution

Substitution and the control of pollution: A comparison of effluent charges and quantity standards under uncertainty

Single-valued price and quantity controls of a polluting activity are compared under uncertainty. The ability to substitute other inputs for the pollutant in the production of a positively valued final good, and the usual discrepancy between the amount of pollution actually consumed and the amount emitted are carefully incorporated. The first is found to influence the degree to which cost fluctuation is reflected in the output of the final good. The second concern alters the region of the benefit function into which output is inserted. Both change the welfare losses associated with random fluctuation in the costs of reducing pollution.

On the income distributional effects of environmental management policies

The paper analyzes the effects of three environmental policy instruments, effluent charges, effluent standards, and effluent treatment subsidies, in the context of a two‐person two‐firm general equilibrium model in which the distribution of income varies with the choice of policy instrument. It is demonstrated that, under reasonable assumptions about the income distribution process and the nature of consumer preferences, each policy instrument corresponds to a different optimal quantity of effluent and a different set of optimal prices. The implication of this result is that consideration of income distributional effects should play an integral part in the formulation of optimal environmental management policies.

Evaluating environmental quality management programmes in which dischargers are grouped

A method is presented for evaluating management programmes in which the dischargers are divided into groups. Analogous non-linear mathematical formulations are presented for direct regulation and effluent charge programmes, and a non-linear branch-and-bound solution procedure is described. A detailed algorithm is described for the effluent charge case; it is shown to be very practical in an application to data for the Delaware estuary.

The Symmetry of Effluent Charges and Subsidies for Pollution Control

Donaldson, D.J. and P.A. Neher ( 1969) 'A synthesis of primitive neoclassical models of closed and open economies.' This JOURNAL 2, 130-4 Friedman, M. (1968) 'The role of monetary policy.' American Economic Review 63, 1-17 Gordon, D.F. and A. Hynes (1970) 'On the theory of price dynamics.' In E.S. Phelps, ed., Microeconomic Foundations of Employment and Inflation Theory (New York) Hanson, J.A. and P.A. Neher ( 1967) 'The neoclassical theorem once again: closed and open economies.' American Economic Review 57, 869-78 Kim, K.S. (1971) 'Sluggish international capital movements and economic growth.' This JOURNAL 4, 557-63 Phelps, E.S. (1967) 'Phillips curves, expectations of inflation and optimal unemployment over time.' Economica 34, 254-81 Stein, J.L. ( 1965) 'Differential growth rates among open economies.' In M.J. Brennan, ed., Patterns of Market Behavior (Providence) Stein, J.L. (1970) 'Monetary growth theory in perspective.' American Economic Review 60, 85-106

Effluent charges and licenses under uncertainty

This paper is concerned with pollution control when the regulators are uncertain about firms' cleanup costs. Under these circumstances, the regulatory authority can reduce expected total social costs (consisting of damages from pollution and cleanup costs) below the levels achievable with either effluent fees or licenses. The reduction is achieved by the use of licenses supplemented by an effluent subsidy and a finite penalty, when effluents are below or above the levels permitted by licenses. The mixed system retains the property of efficiently distributing cleanup among firms.

Water and Effluent Charges and Water‐consumption Studies on Six Product Groups for the Knitting Industry

Charges for water and effluent are rising and problems of availability of the former and disposal of the latter are growing. Extensive relevant studies by Hatra of water consumption and conservation, in the dyeing of nylon hose, nylon socks, acrylic garments, wool garments, wool hank, and synthetic knitted fabric, completed some years ago, are outlined with emphasis on factors leading to economies.

A note on effluent charges and market structure

The purpose of this paper is to reexamine the role of market structure for effluent charges. Tax systems based on minimizing the resource input costs of pollution abatement versus those which also consider the value of the output vectors associated with pre- and post-tax allocations are compared. A simple model is developed which shows that efficient resource allocation in the presence of product market distortions and a pollution externality requires two policy instruments.