Steven Renzetti

Municipal Water Supply and Sewage Treatment: Costs, Prices and Distortions

Municipal water supply and sewage treatment utilities in Ontario, Canada, are studied in order to establish their costs of supply and evaluate their pricing practices. Prices charged to residential and commercial customers are found to be only one-third and one-sixth of the estimated marginal cost for water supply and sewage treatment, respectively. For example, the average price to residential customers is

The Economics of the Environment and Natural Resources

0.32m[superscript 3], while the estimated marginal cost is

Evaluating the welfare effects of reforming municipal water prices

0.87/m[superscript 3]. The estimated cost parameters are combined with estimated residential and nonresidential demands functions in order to calculate approximate welfare losses that arise from overconsumption.

The Role of Water in Manufacturing

List of Figures. List of Tables. List of Boxes. Preface. Acknowledgements. Introduction. Part I: Economics of the Environment:. 1. Models, Systems, and Dynamics. 2. Property Rights. 3. Economics of Pollution Control. Part II: Resource Economics:. 4. Bioeconomics of Fisheries. 5. Forestry Economics. 6. Water Economics. 7. Economics of Non--renewable Resources. Part III: Environmental Valuation:. 8. Environmental Valuation: Introduction and Theory. 9. Environmental Valuation: Stated Preference Methods. 10. Environmental Values Expressed Through Market Behavior. Part IV: Global Environment:. 11. Growth and the Environment. 12. Environmental Accounting. 13. Trade and Environment. 14. The Global Commons. 15. Biodiversity. 16. Sustaining the Environment. Glossary. Index

Measuring the technical efficiency of municipal water suppliers: the role of environmental factors.

Abstract Despite the strong criticisms by economists of water utility pricing practices and the presence of well articulated theoretical models of efficient pricing alternatives, few empirical studies have documented the magnitude of the efficiency gains from altering water prices. The structures of water supply costs and water demands are estimated using data from Vancouver, Canada. A simulation program uses these estimated relationships to compute the impact upon a representative water utilitys output and deficit and upon aggregate consumer surplus of a move from its current practice to efficient prices. Simulation results show that a move to seasonally differentiated pricing (with an annual charge calculated to recoup the resulting deficit) raises aggregate surplus by approximately 4%. This result contrasts with recent water pricing studies that found welfare improvements of approximately 1%.

THE PERFORMANCE OF MUNICIPAL WATER UTILITIES: EVIDENCE ON THE ROLE OF OWNERSHIP

Waters role in manufacturing technologies has received limited attention. A KLEM model of the sectors technology is extended to include two facets of water use: intake and recirculation. Three annual cross-sectional surveys on plant-level water use are pooled and combined with census data to estimate this extended model for the Canadian manufacturing sector over the period 1981–1991. While Canadas water allocation regulations influence private water withdrawals, statistical tests support representing water intake as a variable input. Water intake is found to be a substitute for water recirculation, energy, labour and capital. The relationship between water intake and recirculation is stronger when water intake is process-related rather than related to cooling and steam production. Technological change has been biased in the direction of increased water intake and decreased water recirculation.

An Assessment of the Impact of Charging for Provincial Water Use Permits

This paper extends the multistage procedure set out by Fried, Schmidt, and Yaisawarng (1999) to examine the importance of environmental factors when assessing the technical efficiency of water agencies. However, following Simar and Wilson’s (2007) critique of multistage efficiency analyses, the paper uses a bootstrapping approach in order to have consistent inference. Data are from a cross-section of municipal water agencies in Ontario, Canada, during 1996. The main findings are that environmental factors explain some of the observed variation in efficiency scores and that water agencies’ relative efficiency scores are changed substantially after controlling for environmental factors. (JEL H42, Q25)

Greenhouse Gas Intensity in Canada: A Look at Historical Trends

There is growing concern about the operations of the municipal agencies responsible for supplying potable water and treating sewage, spurred by (1) difficulties of maintaining aging capital stocks in times of tightening fiscal constraints, (2) the water pollution generated by these agencies, (3) problems associated with service quality and reliability, and (4) the recognition of the role played by utilities in allocating scarce water resources. These concerns have lead to a heightened scrutiny of these agencies with increased interest in reforming their operations. In particular, this has focused on an examination of whether the ownership of water utilities is a factor explaining their behavior and whether changing their ownership will lead to improvements in their operations. The purpose of this paper was to critically assess what is known regarding the relationship between the ownership and performance of municipal water utilities. There are a number of theoretical arguments that support the prediction that privately owned water utilities will out-perform comparable publicly funded utilities. These arguments draw on property-rights and public choice theories and principle agent models in order to emphasize the difficulty that governments have in monitoring and providing proper incentives for utility managers. Empirical evidence was obtained from the United States, the United Kingdom, and France based on a variety of performance indicators. These data revealed that there was no compelling evidence of private utilities outperforming public utilities or that privatizing water utilities leads to improvements in performance.

Ecosystem services in the Great Lakes

Population and income growth and global warming have contributed to a growing concern regarding the availability of potable water supplies in Canada. While a number of provinces have already introduced fees for the permits required for direct water withdrawals, others give these permits away gratis. The paper assesses the likely impacts of introducing a charge for water permits upon the water use and production costs of the major water-using sectors in Ontario. These impacts are quantified by using a numerical analysis based upon econometric models of water use. The analysis indicates that by charging for water withdrawal permits the government can encourage water conservation and bring in new revenues, while doing relatively little to raise the industrys costs.

Good to the Last Drop? An Assessment of Canadian Water Value Estimates

L’un des principaux éléments sur lequel s’appuie la récente politique gouvernementale en matière de gaz à effets de serre (GES) est la réduction de l’intensité des émissions de GES. Dans cet article, nous examinons ce projet à la lumière des tendances observées entre 1990 et 2002, et en décomposant les variations d’intensité, grâce à un indice chaîne de Divisia, en effets de composition et en effets techniques. Nos résultats montrent que cette politique obligerait l’industrie à changer ses façons de faire, puisqu’elle devrait effectuer des réductions d’intensité comme jamais auparavant. Notre analyse suggère également qu’il serait difficile d’atteindre ces objectifs uniquement grâce à des progrès technologiques.