Sue Scott

Household energy efficiency in Ireland: A replication study of ownership of energy saving items

Ownership of energy saving items in the home is surprisingly low in Ireland. Logistic regression analysis of data derived from a survey of households reveals significant reasons for not investing in such items. The reasons are somewhat similar to those found by Brechling and Smith for the United Kingdom. Lack of information, non-appropriability, small potential saving, restricted access to credit and transactions costs play an important role, leaving only a minority of non-owners who are model-inconsistent and who are possibly non-optimisers. Some policy implications are outlined.

Assessing Vulnerability of Selected Sectors Under Environmental Tax Reform: The Issue of Pricing Power

Environmental tax reform could bear heavily on manufacturing sectors that are energy intensive and highly traded, in particular if their options for adapting technology are limited. However, to the extent that such sectors can pass on the cost of the environmental taxes through higher prices charged to their customers, they will not suffer a lasting drop in profitability or output. To assess pricing power in key sectors, a model of long-run price setting behaviour is specified and tested. Significant and plausible results emerged from this exercise. Of the six sectors analysed, the Basic metals sector revealed least pricing power and, hence, greatest vulnerability, and the Non-metallic minerals sector revealed most pricing power. The results indicated that the world price, proxied by the US price, was less of a constraint than the EU price, proxied by the German price. Thus, international competitiveness fears are reduced not just where there is good potential for adapting technology but also if application of environmental tax reform is EU-wide.

Investment in water infrastructure: Findings from an economic analysis of a national programme

Abstract Mixed findings emerge from this ex post Cost-Benefit Analysis of a major water investment programme in Ireland. Water supply and conservation investments, where most benefits were internal, generally proved worthwhile. Wastewater investments could not be analysed fully due to lack of environmental data. Here the authors estimated the level of ‘willingness-to-pay’ that would have been required to ‘justify’ the investments. In some cases the required level seemed implausibly high, raising questions as to prioritisation of projects. The authors recommend a more systematic approach to recording environmental benefits in future investment programmes, the next likely wave being in new EU member states seeking to meet environmental standards. The EU, as likely co-funder of these investments, should require systematic recording of environmental benefits.

LRMC and charging the polluter: The case of industrial waste water in Ireland

Abstract Ireland is about to embark on a large programme of expansion of waste water facilities. This raises important questions as to payment of the costs, and in particular of the capital costs of plant that will treat industrys effluent. This paper looks at the pricing of waste water services to industrial dischargers, with the aim of applying the broad principles of public utility pricing and of incorporating environmental considerations. After considering the theoretical optimum level of treatment and the polluter-pays principle, economists recommendations on capacity pricing by utilities are examined, in particular pricing based on long-run marginal cost. An attempt is made to provide a workable method of applying long-run marginal cost pricing to the capital costs of industrial waste water treatment, at present. Preliminary examples of calculated prices are given. We recommend that prices calculated in this manner be announced soon to enable firms to compare the costs of treatment by local authorities with costs of their own treatment or of cleaner production technology, should these options be open to them. Firms will then be able to reserve capacity at the authorities plants. Investment decisions by authorities and firms can be taken in the light of correct prices, and aquatic quality should be achieved at least cost to the community overall.