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Colombia's Discharge Fee Program: Incentives for Polluters or Regulators?

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  • Blackman, Allen

    (Resources for the Future)

Abstract

Colombia’s discharge fee system for water effluents is often held up as a model of a well-functioning, economic-incentive pollution control program in a developing country. Yet few objective, up-to-date evaluations of the program have appeared. Based on a variety of primary and secondary evaluative data, this paper finds that that the program has been beset by a number of serious problems including limited implementation in many regions, widespread noncompliance by municipal sewage authorities, and a confused relationship between discharge fees and discharge standards. Nevertheless, in several watersheds, pollution loads dropped significantly after the program was introduced. While proponents claim the incentives that discharge fees created for polluters to cut emissions in a cost-effective manner were responsible for this success, this paper argues that the incentives they created for regulatory authorities to improve permitting, monitoring, and enforcement were at least as important.

Suggested Citation

  • Blackman, Allen, 2005. "Colombia's Discharge Fee Program: Incentives for Polluters or Regulators?," RFF Working Paper Series dp-05-31, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-05-31
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    References listed on IDEAS

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    1. Lyon, Randolph M., 1989. "Transferable discharge permit systems and environmental management in developing countries," World Development, Elsevier, vol. 17(8), pages 1299-1312, August.
    2. Wang, Hua & Wheeler, David, 2005. "Financial incentives and endogenous enforcement in China's pollution levy system," Journal of Environmental Economics and Management, Elsevier, vol. 49(1), pages 174-196, January.
    3. Sarah West & Ann Wolverton, 2003. "Market-Based Policies for Pollution Control in Latin America," NCEE Working Paper Series 200301, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Mar 2003.
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    5. Blackman, Allen & Harrington, Winston, 1999. "The Use of Economic Incentives in Developing Countries: Lessons from International Experience with Industrial Air Pollution," RFF Working Paper Series dp-99-39, Resources for the Future.
    6. Jean-Philippe Barde, 1994. "Economic Instruments in Environmental Policy: Lessons from the OECD Experience and their Relevance to Developing Economies," OECD Development Centre Working Papers 92, OECD Publishing.
    7. Randall Bluffstone & Bruce A. Larson (ed.), 1997. "Controlling Pollution in Transition Economies," Books, Edward Elgar Publishing, number 1123.
    8. Bohm, Peter & Russell, Clifford S., 1985. "Comparative analysis of alternative policy instruments," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 1, chapter 10, pages 395-460, Elsevier.
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    Cited by:

    1. Allen Blackman, 2010. "Alternative Pollution Control Policies in Developing Countries," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(2), pages 234-253, Summer.
    2. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," RFF Working Paper Series dp-09-10, Resources for the Future.
    3. Maria Angeles O. Catelo, 2007. "Impact Evaluation of the Environmental User Fee System: A Stakeholder Perspective," EEPSEA Special and Technical Paper tp200707t2, Economy and Environment Program for Southeast Asia (EEPSEA), revised Jul 2007.
    4. Caffera, Marcelo, 2011. "The use of economic instruments for pollution control in Latin America: lessons for future policy design," Environment and Development Economics, Cambridge University Press, vol. 16(3), pages 247-273, June.

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    More about this item

    Keywords

    environment; economic incentive; market based instrument; discharge fees; water pollution; Latin America; Colombia;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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