Financial Measures for Water Quality Management Cover Image

Финансови мерки за управление качеството на водите
Financial Measures for Water Quality Management

Author(s): Kenichiro Nakatani
Subject(s): Economy
Published by: Стопанска академия »Д. А. Ценов«

Summary/Abstract: The framework directive of the EU about the waters obliges the member states to use financial measures when taking decisions for water pricing. In the Kioto Protocol, greenhouse gas emissions quotas trading is introduced as one of the financial measures against the pollution. The aim of the present article is to present analyses and comparisons of the financial and economic measures for water quality management. The economic theory considers that the pollution level can not be zero. Because benefiting from the production, we are obliged to pay costs - such as costs related to pollution of waters, for instance. So that it is necessary to determine the optimum pollution level, caused by Pareto’s effectiveness criterion, in order to be able to analyze the financial measures for water quality management The water quality management is a public property (public commodity). Due to the characteristics of non-rival and non-exclusion from the public goods, the government interference is of important significance for achieving of pollution optimum level. The ultra pollution is explained by the presence of external factors. Pigout has pointed out the reason for a market defect - the difference between the private costs and social costs. He also shows how to resolve the market defect by introducing the external factors. Ignoring the social costs by the company which pollutes the environment is the reason for the external factors. Introducing the external factors corrects this lack of cares. The direct control on the extent of the pollution leads to quick improvement of water quality. But it is desirable to apply the Pigout tax and the subsidies in order to reach the optimum pollution level, caused by the Pareto’s effectiveness criterion. The greenhouse gas emissions quotas trading reduces the information amount which the state needs to achieve the optimum pollution level.

  • Issue Year: 2008
  • Issue No: 4
  • Page Range: 71-81
  • Page Count: 11
  • Language: Bulgarian