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Title: A COMPARATIVE ANALYSIS OF THE APPLICATION OF ECONOMIC INSTRUMENTS IN WASTEWATER TREATMENT BETWEEN GERMANY AND INDIA

Author: S. Das and R. Höllander

Year: 2009

Publisher: European Water Resources Association (EWRA)

Description:

Water pollution is one of the most pressing environmental problem. It reduces the quantity of useable water and increases the cost of supplying water. Economic incentives, and especially wastewater tariffs, are vital in achieving least-cost wastewater management. If economically efficient wastewater tariffs are incorporated and if the structure of the project is efficient by design, and little or no additional economic analysis is required. The study presented in this paper where an attempt is made in calculating an effluent tax in controlling wastewater
pollution. In this regard a comparison has been made in respect to India and Germany. Pollution tax in the perspective of wastewater disposal can be denoted as the price the polluter has to pay for using the wastewater disposal services from the environment. As there is no wastewater disposal market so the price cannot be determined in the market and the supply and demand schedules fail to get observed Murty et al. (2000) in their study showed the case of industrial wastewater in India with excess COD concentration and the tax liabilities
calculated using the average tax rate is of Rs 0.32(or.016 euro) per 100 gm. In case of Germany, the effluent charge comprises about 5% of total costs. For our study we consider the case of Leipzig, a city in the state of Saxony. Following the calculation of Murty et al. (2000) the tax on annual wastewater quality per 100 grams in rupees is (5.5/55)x100x100011. When estimated over the total population, the tax per head accounts to be very high for Germany as compared to the case study of Murty et al in India. In Germany the water charge itself
covers the water pollution charge. Both the more than proportional increase of the municipal wastewater charge and the high prospective demand for investment in sewage works has brought about the search for new  organizational forms and different methods concerning water supply and wastewater disposal. But the wastewater policy instruments have been successful in reducing the wastewater pollution and enhancing technological progress in the country. Although the experience in applying economic instruments remains limited, particularly in India, there is evidence that effluent and user charges have the potential for effective
application by helping to pay for environmental improvement. They should be accompanied by investment in wastewater treatment facilities and, locally, by appropriate regulatory instruments as well as programs to persuade water users to change their polluting behaviour.