Natural Resources and Environmental Economics - Essay Example

Natural resources and environmental economics Pesticide pollution and water quality It is d in the EUREAU Report (Dubus & Brown, 2000), thatpesticide contamination of the natural waters is one of the most important problems which at present exist in the countries of European Union (EU). For Belgium, Netherlands, France and the UK this problem is the most acute. While the legal threshold of pesticide residues is equal to 0.1 μg/l, 5 to 10% of waters in Belgium, Denmark, the UK and France are found to be contaminated with the levels of pesticides exceeding these limits. As 65% of Europeans use ground waters for drinking, the seriousness of the problem increases and needs expensive treatment. The major impact is made on the local communities which mostly rely on groundwater supplies. It is important to note the substances, which are mostly found in the waters across Europe: simazine; atrazine and related substances; bentazone; mecoprop. (Dubus & Brown, 2000) The rivers of Europe are mostly polluted with MCPA, atrazine, simazine, diuron and isoproturon. ‘Pesticides have also been found in European rainwater. Approximately half of the compounds analysed were detected. For those detected, most concentrations were below 100 ng/l, but larger concentrations, up to a few thousand nanogrammes per litre, were detected at most monitoring sites. The most frequently detected compounds were lindane (gamma-HCH) and its related isomer (alpha-HCH), which were detected on 90-100% of sampling occasions at most of the sites where they were monitored.’ (Pretty & Brett, 2000) Economic inefficiency of the pesticide (herbicide) water pollution Despite the fact that the issue of water contamination with pesticides is constantly being addressed, and certain improvements take place, the problem is still serious; while much has been said about the environmental impact of the pesticide pollution of waters around Europe, not everyone yet realizes what economic impact pollution carries with itself. Water quality in the UK has already improved, and the level of this improvement is estimated at the level of 25%. (Pretty & Brett, 2000) Further improvements will take place as soon as the existing policies are completed. It is essential to state, that the differences which exist in water quality within the UK are significant, and while Wales is known for possessing 90% of its river length of good water quality, England’s rivers contain only 60% of the waters which may be called good from the viewpoint of their ecology. Economic disadvantages of water pollution lie in the external costs which are necessary to carry out the analysis, monitoring, development and realization of the policies for the improvement of the water quality and elimination of pesticides’ residues (or at least putting them to the reasonable legal limits). There is some data which exists in relation to the external costs of pesticide water pollution for certain European countries. It will be appropriate here to quote the data found in Waibel (2001) about the costs which the Dutch water industry has experienced through the period of 1990-2000; the total costs were equal to 240 million euro. Investigated cost Million Euro Cost for analysis 50.5 Monitoring of resources (inventorial studies) 11.6 Protection of water resources 12.6 Replacing or abandoning of well fields and/or water treatment processes 5.0 Research on water treatment processes and pesticide removal 13.3 Purification/water treatment (also temporary measures) 146.0 Meetings, training and public relations (costs for personnel) 4.6 Total costs 244 Table 1. Costs of pesticide contamination to Dutch water industry in 1990-2000 (Waibel, 2001) Looking through the figures above and analyzing them, one comes to the conclusion that contaminating water with pesticides is economically deficient. Economic deficiency is explained by understanding that poor water quality deprives national and European economy of the certain number of benefits; first of all, better quality of water means better environment, and thus it can be used in various ways, which is economically beneficial in itself. The uses which cannot be delivered when the level of water contamination is too high are agricultural uses, recreation, drinking, etc. This is why modern Governments turn their attention to mostly economic instruments of resolving the issues of pesticide contamination of waters around Europe, and especially in the UK. The advantages of the economic instruments in dealing with pesticide pollution of water in the UK and in Europe can be listed as follows. First of all, economic instruments allow achieving quality objectives, which means that in the system of environmental protection existing at present, the costs which are attracted for the minimization of the pollution impact may not be fully accounted when the discharge consents are set; and different polluters face different levels of costs in the same kinds of pollution. The efficiency of the economic instruments in this relation is in the possibility to change the discharge control and thus to reduce the costs of the pollution elimination. Second, the effectiveness of the economic instruments in pesticide water pollution is in the fact that cost effective instruments are available for the quality improvement. In relation to water quality it is possible to achieve further quality improvements through the use of the cheaper methods than those previously used in the similar situations. ‘For example, the polluter may be required to pay costs on the basis of the estimates of the similar costs to others’. (Portney, 2003) Third, and the last, economic instruments give better basis for the implementation of the principles usually referred to as ‘Polluter Pays principle’. (Portney, 2003) The costs currently faced by polluters don’t reflect the wide range of costs which pesticide pollution causes in reality, and economic instruments’ use may change this situation for the better and account all these costs. The main aim of any economic instrument is to make the polluter aware of the costs which are usually wider than polluters face in reality. ‘They aim to demonstrate the price of environmental damage and make polluters pay accordingly. Polluters then have a choice between paying that price or taking action to reduce their pollution. Where this is cheaper, firms can be expected to take such action. The economic instrument should provide an ongoing incentive for the development of new, more cost-effective pollution control techniques’. (Perman et al, 2003) Critique of the previously used policies The pesticide pollution of waters is the problem which used to exist during a long period of time, and the policies which used to be implemented were not built on the principles of using various economic instruments, and can be criticized for the following disadvantages: 1. They didn’t meat the objectives of environmental protection a the lowest cost possible; 2. The effects of the pollution being the result of the polluter’s activity have not been fully paid for; 3. The policies which have been previously used didn’t give any encouragement for the polluter to do more than it was stated in the consent. Alternative policies In the light of the abovementioned it is appropriate to offer alternative techniques which could be used in the development of the complex policies for the elimination of the pesticide water pollution. One of the possible alternatives may be described as tradeable permits. These tradeable permits are included into the list of economic instruments which could have been used and are the rights which are sold to the polluters to discharge the pesticides or other similar substances within the required limits. The maximum level of the permitted discharge is divided among several polluters, if there is more than one, and some of the polluters will have the possibility to reduce the amount of their discharge to the level lower than permitted, which will decrease the costs and work for the better economic effectiveness of the enterprise; simultaneously, when the polluter decreases the discharges and does not need the tradeable permits in the previous amounts, it may also sell it to other similar polluters and gain additional profits. However, it should not be forgotten that to make the tradeable permits work effectively, there is a number of conditions to be taken into account: there should be more than one pesticides’ discharger to create competitive environment; the costs should vary and thus the dischargers will have stimuli to trade; any scheme developed in this relation should not cause local problems with pollution. ‘In England and Wales1 extra costs for sewerage companies would have to taken into account in setting price limits. However, those limits would also reflect the extent to which companies could reduce their costs by installing pollution control equipment rather than paying the pollution charges (so that there need not be automatic pass through of cost to customers). (Pretty & Brett, 2000) ‘There may be scope for such trading on estuaries such as the Thames since there are likely to be more dischargers along longer stretches of water and therefore the possibility of a larger number of participants. The Government will explore this further as well as the scope for a wider, national trading scheme aimed at reducing inputs of certain substances to the sea. (DEFRA) Policies which can be used to economically eliminate (minimize) pesticide water pollution First of all, the principal objectives of any policy in the area of pesticide water pollution may be named as follows: countryside and natural resource protection; animal health and welfare support; sustainable consumption and production. (Dubus & Brown, 2000) The policy should be realized within the already existing framework which is called Water Framework Directive 2000/06/EC (Tietenberg, 2000) and relates to the integrated management of the water environment across EU. It represents the principal objectives of the EU countries in protecting environment and gives the requirements as for the use of the water planning on the basis of river basin districts; which means that actually the problem of pesticide pollution of water should be addressed on the local level. The specific pollutants should have specific requirements and standards, and the more pollutants will have separate standards, the easier it will be to control the pesticide discharge. On the side of the polluters, it is appropriate to include the Voluntary Initiative (VI) into the strategy; one of the principal disadvantages of the previous policies was stated as the lack of cooperation between the enterprises and the authorities, this is why in the future strategies it is recommended to use the key provisions of the VI within the Farm Assurance Schemes. The main issue to be addressed through the future policies is to reduce the level of pesticides in the water sources of various origins (surface, ground, etc). This issue should be addressed in the following way: 1. It is essential to review the existing policies for spray operators; 2. Regular training of the workers of the polluting enterprises should work for the clarification of the issue seriousness and teaching them effective operating the spray and other machines for the elimination of the accidents which may be fatal for environment; 3. The indicators which should be reviewed on the constant basis should include: pesticides Forum aquatic risk indicator; frequency of detection of top 9 pesticides in ground water above 0.1μg/l number of substantiated water pollution incidents involving agricultural pesticides. The frequency of checking the level of the abovementioned indicators should be made obligatory, and be specified for each polluter and each specific kind of pollutant; moreover, with the use of economic instruments in the development of strategies for pesticide water pollution elimination, the check of the principal indicators should be preformed on the commercial basis, and the scheme of commercial interest for the polluters should be developed with the account of the level the enterprise pollutes the environment and the efficiency with which it works towards the decrease of these pollution’ levels. ‘England Catchment Sensitive Farming (CSF) and Voluntary Initiative to work together to develop local approaches (including catchment stakeholder meetings and engagement with farmers) for protecting, enhancing and restoring water. Special attention paid to identifying problem catchments and priority substances in drinking water catchments and identifying relevant solutions. Voluntary Initiative to raise awareness of water issues amongst farmers and develop programmes (e.g. Water Catchment Project, Crop Protection Management Plans, Sprayer Testing and bio-beds in handling areas) to promote behavioural change and deliver approaches for protecting, enhancing and restoring water.’ (DEFRA) Conclusion The work has been aimed at showing the possibility for the economic instruments to work effectively for the minimization of the pesticide water pollution on the local level. Though there have been shown the disadvantages in the previous policies, the general direction in which the authorities work is correct. There have been shown the possible strategies to make this work even more effective. It is suggested that the future work in the area of pesticide pollution is concentrated on the development of the new economic instruments in combination with ecological knowledge; it will also be useful to account the international experience, though any policy should first of all be implemented at the local level. The advantage of the local addressing the issue is in the fact that local authorities are more able to control each polluter separately, which ultimately makes the whole work in the sphere of environment protection at the state level more effective and produces better results. \ References Baumol, W J, and Oates J 1988, Theory of Environmental Policy, 2nd edition, Prentice Hall, chapters 2-4. Department for Environment, Food and Rural Affairs (DEFRA) environment Available at http://www.defra.gov.uk/environment/ Dubus JM, Brown CD, 2000, Pesticides in rainfall in Europe, Environmental Pollution, Vol,110, 331-344. Perman, R., Y. Ma, J. McGilvray and M. Common, 2003, Natural Resource and Environmental Economics, 3rd edition, Harlow: Pearson Education Limited. Portney, P., 2003 Market based approaches to environmental policy, Resources, 151. Pretty, JN, Brett C, 2000, An assessment of the total external costs of UK agriculture, Agricultural Systems 65 (2), pp. 113-136 Tietenberg, T., 2000, Environmental and Natural Resource Economics, 5th Edition, Illinois: Scott, Foresman and Company Waibel, H. 2001, Experience with Cost Benefit Studies of Pesticides in Germany. Kiel, Vauk Verlag, Germany Read More