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Water pollution abatement cost function: methodological issues and an application to small-scale factories in an industrial estate in India

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  • GOLDAR, BISHWANATH
  • MISRA, SMITA
  • MUKHERJI, BADAL

Abstract

Formulation and estimation of a correctly specified abatement cost function would be central to policy formulation regarding imposing taxes or user-fees as well as of sharing social cost in the presence of environmental pollution. Often in research, the output of an abatement activity for water pollution appears to us not to have been clearly specified. This activity is very distinct from whatever is the actual product of the plant. We propose in this paper that the output is only and exclusively the reduction in the level of the pollutant in the outflow from the plant and illustrate this with primary data for small-scale factories in Nandesari Industrial Estate in Gujarat, India. The cost function estimates provide evidence of significant scale economies and high marginal abatement cost in wastewater treatment by small-scale factories.

Suggested Citation

  • Goldar, Bishwanath & Misra, Smita & Mukherji, Badal, 2001. "Water pollution abatement cost function: methodological issues and an application to small-scale factories in an industrial estate in India," Environment and Development Economics, Cambridge University Press, vol. 6(1), pages 103-122, February.
    • Handle: RePEc:cup:endeec:v:6:y:2001:i:01:p:103-122_00
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    Cited by:

    1. Rita Pandey, 2005. "Estimating Sectoral and Geographical Industrial Pollution Inventories in India: Implications for Using Effluent Charge Versus Regulation," Journal of Development Studies, Taylor & Francis Journals, vol. 41(1), pages 33-61.
    2. Rahman, Shaikh M. & Larson, Donald F. & Dinar, Ariel, 2012. "The cost structure of the clean development mechanism," Policy Research Working Paper Series 6262, The World Bank.
    3. Amir Hossein Montazer Hojat & Khalid Abdul Rahim & Lee Chin, 2010. "Firm's Environmental Performance: A Review of Their Determinants," American Journal of Economics and Business Administration, Science Publications, vol. 2(3), pages 330-338, September.
    4. Bishwanath Goldar & Rita Pandey, 2001. "Water pricing and abatement of industrial water pollution: study of distilleries in India," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(2), pages 95-113, September.
    5. Bishwanath Goldar & Rita Pandey, 2001. "Water pricing and abatement of industrial water pollution: study of distilleries in India," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 4(2), pages 95-113, June.
    6. Jagath C. Edirisinghe, 2014. "Taxing the Pollution," Journal of South Asian Development, , vol. 9(1), pages 71-90, April.

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