Pollution-reducing infrastructure and urban environmental policy

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Based on a case study on Bombay, we argue that urban infrastructure, like the sewage system and the municipal waste collection, is an important instrument for urban environmental policy. We develop a spatial general equilibrium model of a monocentric city, where infrastructure serves as a public means of abating pollution. Analyzing the optimal supply of pollution-reducing infrastructure, we conclude that it has to be geographically differentiated, even if pollution is homogenous. In a city with a growing population the provision of infrastructure has to be changed throughout the city, not only in newly inhabited areas. Terms of use: Documents inUrban environmental policies, based on Pigouvian taxes and pollution-reducing infrastructure, are mutually dependent. In two settings of public or private infrastructure, we show that fiscal environmental policies have to be spatially differentiated, and that income transfers are necessary in order to implement the first best allocation as a residential market equilibrium. JEL-Classification 1 SummaryBy studying the case of Bombay, the biggest urban agglomeration in India, we show that providing adequate 'pollution-reducing' infrastructure, e.g. the sewage system or waste collection and disposal, can be a very effective instrument of urban environmental policy. The questions are, how can pollution-reducing infrastructure be supplied efficiently and how has it to be combined with economic instruments of environmental policy (like Pigouvian taxes) in order to reach an efficient outcome?Our theoretical analysis is based on a general spatial equilibrium model of a monocentric city and its hinterland. The model comprises two private goods (consumption of goods and living space), two public goods (infrastructure and environmental quality), and a continuum of households, who choose their place of residence. Environmental pollution is a by-product of the households' consumption of goods. Infrastructure reduces the polluting emissions per unit of consumption: a part of the pollution is disposed of 'properly' and causes no environmental damage. Infrastructure is a public good, since it serves to reduce the polluting emissions of all households residing in the close neighbourhood. The analysis has two parts.First, the Pareto optimal allocation is determined. We show that the efficient allocation of pollution-reducing infrastructure geographically differentiated, i.e. infrastructure density declines from the centre ...

Correlated environmental impacts of wastewater management in a spatial context

“…Indeed, in the case of both sewer and septic systems, different technologies exist with different levels of performance regarding water pollution abatement. An extension of this work could endogeneize infrastructure provi-sion, in the vein of (Quaas, 2007), and allow for abatement efficiency to vary with the level of investment, especially in the case of sewer. This would introduce strategic interaction between policy makers in charge of, say, exurbia, suburbia, the primary or the secondary urban area.…”

“…Wastewater infrastructure is assumed to be produced, installed and monitored by firms established outside the metropolis : refer to (Quaas, 2007) for a model with endogeneous infrastructure production.…”