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ECONOMIC INSTRUMENTS AND CLEAN WATER: - page 11 / 30

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When one considered the prevailing policy traditions, the approach to pollution control was rather logical. There was a considerable belief in public planning and in the capacity of local authorities. Although there was some rhetoric about the Polluter-Pays principle, effluent charges were not introduced. Manufacturing industries were encouraged to discharge to municipal sewage plants, and the Environmental Protection Act instructed the municipalities to offer subsidies for their construction, which meant that user fees did not reflect actual costs. In some cities, such as Copenhagen, user fees were not imposed until 1977; instead, sewage plants were financed out of the general revenue. This subsidy requirement had been copied from the Water Course Act of 1949 and the Sewer Act of 1907 without much new consideration. Except for the argument of ‘the general interest’ advanced in a Sewer Act proposal in 1901, no thorough argument for this reversal of the Polluter-Pays principle was presented.

Even where policy-makers intended to deviate from standard operating procedures, they fell back on a traditional programme design approach: ‘look at Sweden’. Swedish policies were in many ways seen as exemplary, and it was under this influence that a relatively independent Environmental Protection Agency was established. But the Swedes were also fond of subsidies, and Danish policy- makers did not question their approach. As a result, many public sewage plants were constructed in Denmark during the 1970s, and Denmark became a world leader in this sort of pollution control. Never questioned was whether public operation of end-of-pipe solutions would be more expensive than control at the source, or whether public responsibility was to be preferred to private pollution control. The Danish national policy style resulted in the public sector assuming responsibility for pollution management by constructing public sewage plants. Extending public institutions fit nicely with the standard operating procedures of Danish policy-making.

This policy was effective on its own terms, that is, in producing new sewerage treatment facilities, but highly ineffective from the broader perspective of reducing water pollution. Municipalities quickly expanded their local sewage plants, although not quite to the treatment level preferred by national authorities. The control of industrial pollution proceeded only slowly, however. Before requirements could be set for manufacturing industries, local authorities had to carry out the tedious process of water quality planning. Responsibility for this planning was vested in new county authorities, who lacked both the skill and data to carry out the task. When the counties released the first drafts of water quality plans, conflicts with municipalities arose on the targets. Consequently, it took more than 10 years before water quality plans were elaborated (Fenger and Jensen, 1977; Hansen and Rask, 1986; Andersen, 1989). In the meantime, there were few incentives for firms to reduce pollution on their own.

Local compliance, so

authorities as not to

were also reluctant to tighten discharge

lose

jobs

and

tax

income.

In

fact,

the

requirements or even municipalities tended

to

monitor

to

use the

environment as a competitive parameter to Firms were granted discounts on waste water relaxed.

attract new firms, secure jobs, and treatment, and controls exercised by

increase tax revenues. the municipalities were

As a consequence, gross industrial discharges were approximately at the same level in the late 1980s as at the outset, when measured in terms of oxygen-binding substances (BOD/COD) (see Figure 3). About 50 per cent of industrial discharges were treated at public sewage plants, which did have some effect in reducing pollution, but this was an expensive and essentially problem-displacing solution, as waste water was converted to sludge in increasing volumes.

(Figure 3 here)

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