Optimal Taxing for the Abatement of Water Pollution

Abstract

The Dantzig‐Wolfe decomposition algorithm is posited as a method of finding the optimal treatment configuration for meeting water quality standards along a river basin and simultaneously determining optimal pollution taxes to achieve this configuration when the central authority does not know treatment cost functions. Simulated use of the algorithm using actual data from the Miami River of Ohio indicates that the algorithm performs these tasks satisfactorily. The implications of this analysis are that a central authority can, through a planning (tatonnement) process involving proposed taxes and polluter responses, effectively determine a set of near‐optimal pollution taxes without complete knowledge of treatment costs (i.e., without complete treatment cost functions) in relatively few iterations A detailed model of the constraint set is formulated in the appendix, which is available on microfiche along with the entire article. Order from the American Geophysical Union, Suite 435, 2100 Pennsylvania Ave., N.W., Washington D.C. 20037. Document W70‐001; $1.00. Payment must accompany order.

Efficiency Evaluation and Policy Analysis of Industrial Wastewater Control in China

“…Upton (1968) argued that there is an optimal tax on water pollution for companies, and calculated the cost that one society needs to bear in order to ensure clean water resources [33]. Based on the algorithm developed by Dantzig-Wolfe and the data of the Miami River in Ohio, Hass concluded in 1970 that a pollution management method both satisfying optimal pollution taxation and water quality even if the central government doesn't know the form of the cost function of pollution control [34]. However, there are also quite a few studies that reached the opposite conclusion: based on their quantitative analysis on the effects of taxation on wastewater and solid waste emission, Coeck et al concluded in 1995 that taxation cannot obtain the optimal result of pollution reduction and tax income increase at the same time.…”

Systems Analysis by Multilevel Methods; With Applications to Economics and Management

“…In this section, we discuss a pollution control problem taken from Hass (1970). A stretch of the Miami River (Ohio, U.S.A.) is considered.…”

“…The overall problem is formulated in section 10.2.1. A study of Hass (1970), who utilized the Dantzig-Wolfe method for nonlinear programs, is discussed in section 10.2.2. An alternative approach developed by Haimes et at.…”

“…Data for the parameters aij, Wi> bi, and qj are provided in Hass's article (Hass, 1970). We will not concern ourselves here with how those data were derived but remark only that the data-gathering work is not trivial.…”

Evaluation of Quality Parameters in Water Resource Planning. (A State-of-the-Art Survey of the Economics of Water Quality)

“…Additional characteristics of water composition include: pH (potential of hydrogen), which indicates acidity (1-7), neutrality (7), or alkalinity (7)(8)(9)(10)(11)(12)(13)(14)(15) Color in water is measured in Jackson Color Units (JCU), and can usually be removed from domestic supplies at low cost. Turbidity…”