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Economic instruments in assimilative based environment: A case study of water pollution abatement by industries in India

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Author Info
M.N. Murthy () (Instittue of Economic Growth)
Abstract

Environmental resources supply waste disposal services that are demanded by the industry. If the property right for the environmental resources is with the public or with the government, the supply of waste disposal services depends upon the assimilative capacity of environmental media and the damages the public receives from the pollution. If the industry has to comply with the environmental regulation, the demand for the waste disposal services by the industry depends upon the cost of pollution abatement. Marginal damages to the public from pollution and the marginal cost of pollution abatement to the industry could be regarded as the supply and demand prices for the environmental services. Pollution tax is nothing but the price of waste disposal services with respect to which supply is equal to demand. If the environmental standards are fixed depending upon the assimilative capacity of environmental media, the supply of environmental services is fixed and the tax or price then entirely depends on the demand. Since the standards are normally given for a vector of pollutants as it is the case of MINAS standards in India, there will be pollutant specific taxes. A method of estimating polluting specific taxes is described in this paper. The estimates of pollutant specific taxes for controlling water pollution from industries in India are obtained for BOD, COD and SS.

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Paper provided by Institute of Economic Growth, Delhi, India in its series Institute of Economic Growth, Delhi Discussion Papers with number 59.

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Length: 24 pages
Date of creation: Oct 2002
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Handle: RePEc:ind:iegddp:59

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  1. Cropper, Maureen L & Oates, Wallace E, 1992. "Environmental Economics: A Survey," Journal of Economic Literature, American Economic Association, vol. 30(2), pages 675-740, June. [Downloadable!] (restricted)
  2. Klaus Conrad & Catherine J. Morrison, 1985. "The Impact of Pollution Abatement Investment on Productivity Change: AnEmpirical Comparison of the U.S., Germany, and Canada," NBER Working Papers 1763, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January. [Downloadable!] (restricted)
  4. Pittman, Russell W, 1983. "Multilateral Productivity Comparisons with Undesirable Outputs," Economic Journal, Royal Economic Society, vol. 93(372), pages 883-91, December. [Downloadable!] (restricted)
  5. Dale W. Jorgenson & Peter J. Wilcoxen, 1990. "Environmental Regulation and U.S. Economic Growth," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 314-340, Summer. [Downloadable!] (restricted)
  6. Heyes, Anthony G., 1997. "Environmental Regulation by Private Contest," Journal of Public Economics, Elsevier, vol. 63(3), pages 407-428, February. [Downloadable!] (restricted)
  7. Pargal, Sheoli & Wheeler, David, 1996. "Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1314-27, December. [Downloadable!] (restricted)
  8. Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-80, May. [Downloadable!] (restricted)
  9. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February. [Downloadable!] (restricted)
  10. Murty, M.N. & Kumar, Surender, 2002. "Measuring the cost of environmentally sustainable industrial development in India: a distance function approach," Environment and Development Economics, Cambridge University Press, vol. 7(03), pages 467-486, July. [Downloadable!]
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