Doede Wiersma

Weight-based pricing in the collection of household waste: the Oostzaan case

This paper provides an empirical analysis of the effects of weight-based pricing in the collection of household waste. Using a comprehensive panel data set on all households in a Dutch municipality we estimate short-run as well as long-run price effects for the amounts of both compostable and non-recyclable household waste. We find significant and sizeable price effects, with the elasticity for compostable waste being four times as large as the elasticity for non-recyclable waste. Long-run elasticities are about 30% larger than short-run elasticities.

Evaluation of nature conservation

Recent literature shows a lively debate on how tocapture ecological and environmental aspects indifferent evaluation methods and the closely relatedissue of the (im)possibilities of monetization ofthese aspects. Although economists in general tend tofavour Cost-Benefit Analysis (CBA) aboveMulti-Criteria Analysis (MCA), part of the literaturesuggests that CBA falls short of being the onlydecision-making device for environmental problems,both for theoretical and practical reasons. This paperdiscusses both evaluation methods and the main resultsof a major, publicly-financed nature conservationproject in The Netherlands.The evaluation method combines the straightforwardnessof CBA with the flexibility of MCA. Conceptually, itconsists of a MCA, the net result of a CBA beingintegrated as one of the criteria. The differentaspects of the nature conservation project that can bemonetized are incorporated into the CBA. Otheraspects such as changes in biodiversity or scenicbeauty are analysed in their own dimension,provided (cardinal) quantification is possible. Infact, the analysis consists of a very simple MCA, withtwo criteria: social costs and a quantitative measureof nature.Quantifying the amount of nature in its own,non-monetary dimension is a key element of theempirical analysis. A detailed quantitative estimateis made of the improvement of nature, based upon 564species and 131 different ecosystems. The result ofthe evaluation is a trade-off at the national levelbetween ecological improvements (plus 18 percent) andsocial costs (DFl. 3.4 billion net present value). Dueto the detailed quantification of the effect on naturethe evaluation also yields results about thecost-effectiveness of four different instruments tocreate and to preserve nature. That part of theanalysis shows that complete withdrawal ofagricultural land for nature purposes in the projectin general is more cost-effective than subsidizingnature-friendly farming, although the former is moreexpensive.

Static and dynamic efficiency of pollution control strategies

A great deal of the economic literature on pollution control strategies concentrates on the efficiency of environmental policy instruments. Most analytical studies in this field show that market instruments are more efficient with respect to the cost of pollution abatement of a given number of polluters than non-market instruments. According to several analytical studies, market instruments should also be more efficient with respect to innovation in pollution abatement equipment than non-market instruments. In the empirical literature a great number of case studies exist with estimations of the savings of abatement costs of market instruments in a situation without technological progress. Empirical studies about the impact of environmental policy market instruments on the abatement costs in situations with technological progress are lacking.The purpose of this paper is to fill this gap. The paper deals with an empirical estimation of abatement costs for the emission of SO2 of coal-fired electricity units in the Netherlands from 1985 to 2000. First, the working of market instruments and non-market instruments (the existing environmental policy of the Dutch government) is simulated in a static situation. Second, we analyse the learning effects of flue gas desulphurization. The efficiency advantage of market instruments turns out to be larger in a situation of technological progress than in a static situation.

Inefficiencies in Public Environmental Services

The paper discusses efficiency issues in the public provision of environmental services, in particular waste water treatment. It is shown that in the face of increasing, respectively decreasing returns to scale the zero profit constraint of a cost minimizing public firm induces underinvestment, respectively overinvestment in public capacity compared with efficient allocation between public purification and effluent control by private polluters. X-inefficiency of the public firm counter-acts the inefficiency in allocation arising from overinvestment, and it reinforces the inefficiency in allocation in case of underinvestment in public purification capacity. As subsidy can bring down the users charge imposed on sources, but it will also increase X-inefficiency. The subsidy counteracts underinvestment but reinforces overinvestment in public capacity.

The Public firm and Strategic Interaction: The Case of Public Waste Water Management

Usually public monopoly firms have the task of providing services while covering costs with the revenue from charges paid by users. From the literature it is known that if users take the charge as given, the zero-profit constraint of the public firm results in an inefficient allocation of resources. In this paper, it is shown that the inefficiency will be completely corrected if the not-for-profit supplier faces a surplus-maximising single purchaser. The model has been applied to analyse the efficiency of public wastewater management, but it also has regulatory implications for other markets that cannot be liberalised.

ON ECONOMIC GROWTH, TECHNOLOGY AND THE ENVIRONMENT

Over the last two hundred years the world economy has shown a process of economic growth with only a few interruptions. This development began in the eighteenth century in Great Britain, with the invention of how to organize mass production and how to use technology for that purpose. In the course of time this industrial revolution spread to other countries and technological progress has been incorporated into the system of industrial production. As a result, production has increased substantially, world population has expanded and average world GDP per capita has increased from

Innovation and Pollution Control

200 U.S. in 1775 to

Technology-forcing through environmental regulation

1800 in 1975 (Krelle, ed., 1989).