Effluent Charges versus Effluent Standards

  • Karl-Göran Mäler
Part of the International Economic Association Series book series (IEA)


In their book, Managing Water Quality [6], Kneese and Bower suggested that the use of effluent charges may be more efficient than the use of regulations in environmental policy. The reason for this is that charges induce those firms, for whom it is cheap to reduce activities harmful to the environment, to undertake large-scale reductions, while higher-cost firms are induced to undertake only lesser reductions. This argument was formulated mathematically by Baumol and Oates [2], and they proved rigorously that under certain assumptions effluent charges are efficient while effluent standards may be inefficient.


Environmental Policy Waste Treatment Environmental Standard Waste Load Ambient Standard 
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Copyright information

© International Economic Association 1974

Authors and Affiliations

  • Karl-Göran Mäler

There are no affiliations available

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