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Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence from Brazil

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  • José Féres
  • Arnaud Reynaud

Abstract

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.

Suggested Citation

  • José Féres & Arnaud Reynaud, 2005. "Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence from Brazil," Land Economics, University of Wisconsin Press, vol. 81(3).
  • Handle: RePEc:uwp:landec:v:81:y:2005:i:3:p396-411
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    References listed on IDEAS

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    1. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
    2. Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
    3. Li, Baibing & Martin, Elaine B. & Morris, A. Julian, 2002. "On principal component analysis in L1," Computational Statistics & Data Analysis, Elsevier, vol. 40(3), pages 471-474, September.
    4. Kumar, Surender, 2004. "Analysing industrial water demand in India: An input distance function approach," Working Papers 04/12, National Institute of Public Finance and Policy.
    5. Wang, Hua & Lall, Somik, 1999. "Valuing water for Chinese industries : a marginal productivity assessment," Policy Research Working Paper Series 2236, The World Bank.
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    Citations

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    Cited by:

    1. José Féres & Arnaud Reynaud & Alban Thomas, 2012. "Water reuse in Brazilian manufacturing firms," Applied Economics, Taylor & Francis Journals, vol. 44(11), pages 1417-1427, April.
    2. Linz, Teresa & Tsegai, Daniel W., 2009. "Industrial Water Demand analysis in the Middle Olifants sub-basin of South Africa: The case of Mining," Discussion Papers 49927, University of Bonn, Center for Development Research (ZEF).
    3. FERES José & REYNAUD Arnaud, 2006. "Does Formal or Informal Environmental Regulation have an Impact on Costs? An Empirical Analysis of the Brazilian," LERNA Working Papers 06.16.209, LERNA, University of Toulouse.
    4. Le Ha Thanh, 2010. "Assessing the Impacts of Environmental Regulations on the Food Processing Industry in Vietnam," EEPSEA Research Report rr2010032, Economy and Environment Program for Southeast Asia (EEPSEA), revised Mar 2010.
    5. 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.

    More about this item

    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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