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Environmental taxation and industrial water use in Spain

Author

Listed:
  • Vallés-Giménez, Jaime

    (Universidad de Zaragoza)

  • Zárate-Marco , Anabel

    (Universidad de Zaragoza)

Abstract

The Spanish Water Act, 2001 shifted responsibility for wastewater treatment from municipal to regional government, and as a consequence the Autonomous Communities have begun to levy a Sanitation Charge, apparently with environmental objectives. Industrial demand for water in Aragon is estimated in this paper using a double logarithmic model with panel data to establish whether regional Sanitation Charges rationalise water consumption. The key explanatory variable is the Sanitation Charge, in addition to the water supply charges payable in the towns and cities of Aragon and other variables which capture the characteristics of the firms in the sample. The reduction in water demand achieved appears to be due to the environmental charge rather than to any actual increase in firms’ water costs.

Suggested Citation

  • Vallés-Giménez, Jaime & Zárate-Marco , Anabel, 2013. "Environmental taxation and industrial water use in Spain," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 25, pages 133-162.
    • Handle: RePEc:ris:invreg:0202
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    More about this item

    Keywords

    Industrial water consumption; Sanitation Charge; tax centralisation; regional government.;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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