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Recycled Effluent: Should the Polluter Pay?

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  • Eli Feinerman
  • Yakir Plessner
  • Dafna M. DiSegni Eshel

Abstract

A coastal city can either dispose of recycled effluent by dumping it in the sea, or transfer it to farmers in its hinterland for irrigation. Who should bear the cost of recycling? Three alternatives are employed: a central planner who maximizes the combined utility of city and farmers; regulation by prices, for which purpose we develop the city's supply function;and a bargaining framework for the allocation of costs. The main conclusions are that “the polluter pays” rule cannot be justified in principle and that bargaining may result in inefficiency. We demonstrate with an example from Israel that essentially conforms to the theoretical structure. Copyright 2001, Oxford University Press.

Suggested Citation

  • Eli Feinerman & Yakir Plessner & Dafna M. DiSegni Eshel, 2001. "Recycled Effluent: Should the Polluter Pay?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 958-971.
    • Handle: RePEc:oup:ajagec:v:83:y:2001:i:4:p:958-971
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    File URL: http://hdl.handle.net/10.1111/0002-9092.00222
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    Citations

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    Cited by:

    1. Luckmann, Jonas & Grethe, Harald & McDonald, Scott, 2015. "When Water Saving Limits Recycling: Modeling Economy-wide Linkages of Wastewater Use," 2015 Conference, August 9-14, 2015, Milan, Italy 212161, International Association of Agricultural Economists.
    2. Reznik, Ami & Feinerman, Eli & Finkelshtain, Israel & Fisher, Franklin & Huber-Lee, Annette & Joyce, Brian & Kan, Iddo, 2017. "Economic implications of agricultural reuse of treated wastewater in Israel: A statewide long-term perspective," Ecological Economics, Elsevier, vol. 135(C), pages 222-233.
    3. Shuai Chen & Jiameng Yang, 2023. "Environmental Pollution Liability Insurance Pricing and the Solvency of Insurance Companies in China: Based on the Black–Scholes Model," IJERPH, MDPI, vol. 20(2), pages 1-21, January.
    4. Ami Reznik & Ariel Dinar, 2022. "Local conditions and the economic feasibility of urban wastewater recycling in irrigated agriculture: Lessons from a stochastic regional analysis in California," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 44(4), pages 2115-2130, December.
    5. Hurlimann, Anna C., 2009. "Water supply in regional Victoria Australia: A review of the water cartage industry and willingness to pay for recycled water," Resources, Conservation & Recycling, Elsevier, vol. 53(5), pages 262-268.
    6. Luckmann, Jonas & Grethe, Harald & McDonald, Scott, 2015. "When Water Saving Limits Recycling: Modeling Cascading Water Use in a Computable General Equilibrium Framework," Conference papers 332622, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Luckmann, Jonas & Ihle, Rico & Kleinwechter, Ulrich & Grethe, Harald, 2015. "The Effects of Vietnamese Export Policies on the World Market Integration of Domestic Rice Markets," 2015 Conference, August 9-14, 2015, Milan, Italy 212159, International Association of Agricultural Economists.
    8. Gilad Axelrad & Eli Feinerman, 2009. "Regional Planning of Wastewater Reuse for Irrigation and River Rehabilitation," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 105-131, February.
    9. Ami Reznik & Ariel Dinar & Francesc Hernández-Sancho, 2019. "Treated Wastewater Reuse: An Efficient and Sustainable Solution for Water Resource Scarcity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(4), pages 1647-1685, December.
    10. Fei Han & Junming Li, 2022. "Spatial Pattern and Spillover of Abatement Effect of Chinese Environmental Protection Tax Law on PM 2.5 Pollution," IJERPH, MDPI, vol. 19(3), pages 1-16, January.

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