This paper aims at characterizing water demand by Brazilian manufacturing plants and at assessing the potential impacts of environmental policies on industrial water use. We first show that the price elasticity of the water demand, –1.0 on average, is high enough for a water charge to act as an effective policy tool for reducing water consumption. Results also provide some evidence of a tradeoff between water quality improvement and water conservation policies, since more stringent environmental standards may lead to a higher water demand. A joint use of environmental norms and water charges may reconcile both policy goals.
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Article provided by University of Wisconsin Press in its journal Land Economics.
Find related papers by JEL classification: Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water L5 - Industrial Organization - - Regulation and Industrial Policy
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