Enforcement of environmental charges: some economic aspects and evidence from the German Waste Water Charge

Abstract

Enforcement problems are usually analysed with respect to command‐and‐control measures of environmental regulation. The recognition that any environmental policy instrument entails an enforcement problem in principle is basic to a comparative analysis of enforcement effects. This paper deals with the comparative enforcement effects of charges: How does enforcement of a charge function? Which problems occur particularly in the enforcement of charges? Could enforcement be facilitated by a specific construction of charge laws? Are economic concepts of charge enforceable at all, and if so, under what conditions? Are charges more readily enforceable than other instruments? Therefore, some economic theory assessments of enforcement processes are presented first. In a third part, the paper sheds light on the practical experience made with the enforcement of the German Waste Water Charge. It is argued that the well worn thesis of an enforcement‐friendly ‘self‐control’ of market instruments is based on unrealistic assumptions. Whether against this background enforcement of environmental policy can be facilitated by an increased application use of charges must be viewed sceptically in an overall assessment of the problematic. Moreover, the transition from allocative control tasks to fiscal environmental charges may well be a symptom of rather than a contribution to the solution of the political and administrative crisis of enforcement. Especially for charges, the crucial question seems to be the political implementation rather than concrete enforcement by local authorities. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment