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Colombia's Discharge Fee Program: Incentives for Polluters or Regulators?

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  • Blackman, Allen

    ()
    (Resources for the Future)

Abstract

Colombia’s discharge fee system for water effluents is often held up as a model of a well-functioning, economic-incentive pollution control program in a developing country. Yet few objective, up-to-date evaluations of the program have appeared. Based on a variety of primary and secondary evaluative data, this paper finds that that the program has been beset by a number of serious problems including limited implementation in many regions, widespread noncompliance by municipal sewage authorities, and a confused relationship between discharge fees and discharge standards. Nevertheless, in several watersheds, pollution loads dropped significantly after the program was introduced. While proponents claim the incentives that discharge fees created for polluters to cut emissions in a cost-effective manner were responsible for this success, this paper argues that the incentives they created for regulatory authorities to improve permitting, monitoring, and enforcement were at least as important.

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Bibliographic Info

Paper provided by Resources For the Future in its series Discussion Papers with number dp-05-31.

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Date of creation: 16 Jun 2005
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Handle: RePEc:rff:dpaper:dp-05-31

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Related research

Keywords: environment; economic incentive; market based instrument; discharge fees; water pollution; Latin America; Colombia;

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  1. Sarah West & Ann Wolverton, 2003. "Market-Based Policies for Pollution Control in Latin America," NCEE Working Paper Series 200301, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Mar 2003.
  2. Baumol, William J, 1972. "On Taxation and the Control of Externalities," American Economic Review, American Economic Association, vol. 62(3), pages 307-22, June.
  3. Blackman, Allen & Harrington, Winston, 1999. "The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution," Discussion Papers dp-99-39, Resources For the Future.
  4. Bohm, Peter & Russell, Clifford S., 1985. "Comparative analysis of alternative policy instruments," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 10, pages 395-460 Elsevier.
  5. Wang, Hua & Wheeler, David, 2005. "Financial incentives and endogenous enforcement in China's pollution levy system," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 174-196, January.
  6. Lyon, Randolph M., 1989. "Transferable discharge permit systems and environmental management in developing countries," World Development, Elsevier, vol. 17(8), pages 1299-1312, August.
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Cited by:
  1. Caffera, Marcelo, 2011. "The use of economic instruments for pollution control in Latin America: lessons for future policy design," Environment and Development Economics, Cambridge University Press, vol. 16(03), pages 247-273, June.
  2. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," Discussion Papers dp-09-14-efd, Resources For the Future.
  3. Maria Angeles O. Catelo, 2007. "Impact Evaluation of the Environmental User Fee System: A Stakeholder Perspective," EEPSEA Special and Technical Paper tp200707t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jul 2007.
  4. Allen Blackman, 2010. "Alternative Pollution Control Policies in Developing Countries," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 234-253, Summer.

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