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staat for the so-called state waters, mainly the Rhine and the North Sea where the bulk of industry is located. Waterboards that discharge into state waters also have to pay the state water levy.

All entities discharging waste into surface waters are obliged to pay a levy, either to the local Waterboard or to the state. The funds from the state water levy are used to provide subsidies for companies that reduce pollution. Because the levies were set at a relatively high level, industries have been very interested in reducing pollution and seeking advise and subsidies from RIZA, and in fact 71 per cent of industrial investments for water pollution control in the Netherlands from 1970-1989 were supplied by means of the state water levy.

As local Waterboards increase their investment in sewage treatment, the bills to local industries also increase. Therefore, one could expect such local Waterboards to be as reluctant as local authorities in Denmark and France to disadvantage local industries by aggressively pursuing pollution reduction. This could result in insufficient pollution control, and pollution would then reach the waters of other waterboards. There are some counterbalances to this tendency. The Rijkswaterstaat, for example, may claim that a Waterboard acts ’insufficiently’and assess a levy for all the waters leaving the territory of the disobedient. This clause has only been used once, in negotiations, and in general the Waterboards have been keen to undertake water pollution control. Although it is not clear why this is so, it may be due to the professional attitudes of the Waterboard staffs and the value placed by farmers on clean waters for irrigation.

The system of economic instruments in the Netherlands is different from the other three countries because of the strict use of the Polluter-Pays Principle. There were no subsidies for public sewage facilities, and the levies applied to all dischargers, regardless of their location. The state water levies have, however, differentiated between fresh and salt waters, and it has generally been more moderate than the levies imposed by local waterboards.

The Dutch system of water pollution control is exceptional, and so is its success. Two important works by Dutch scholars have demonstrated how the levies provided a decisive incentive for industries to reduce water pollution (Bressers, 1988). From 1970 to 1987, pollution of oxygen-binding substances was reduced by 80 percent, in spite of increased economic activity (see Figure 6). Reductions were especially significant for companies discharging to state waters, a fact that can be explained only by the earmarking of revenues for pollution control and the activities of RIZA.

(Figure 6 here)

Furthermore, the Dutch system was cost-efficient, because it caused industry to control more pollution at the source, and thus reduced the need for costly end-of-pipe treatment at public sewage plants. As a result, the capacity of sewage plants in the Netherlands is substantially lower, measured per capita, than in Denmark, although in both countries more than 90 per cent of the population is connected to sewage plants. Figures also show that the gross discharges of Dutch industry has become substantially lower than Danish industry. The impact of levies in the Netherlands has been so forceful that some Waterboards have experienced problems of overcapacity, due to the quick reduction of discharges from industry. As we shall see below, the Dutch problem of overcapacity has been significantly smaller than what Denmark is experiencing now.

The legacy of water management helped the Netherlands establish a coherent and self-financing

scheme

of

water

pollution

control.

In

a

institutionalised practices of water management

state where municipalities have little provided an excellent infrastructure. The

independence, Dutch welfare

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