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Effluent Tax in Germany

  • Chapter
Use of Economic Instruments in Water Policy

Part of the book series: Global Issues in Water Policy ((GLOB,volume 14))

Abstract

The exceptionally high growth in pollution-intensive sectors (such as energy, chemicals, and construction) in the post-war period in Germany caused serious environmental problems as the construction of wastewater treatment facilities did not keep pace and posed a serious threat to future water supply. This chapter analyses the policy mix of economic and regulatory instruments, which was introduced in the Federal Republic of Germany to address this threat. The policy mix consists of discharge permits (Federal Water Act, 1957), discharge limits and technical standards (Waste Water Ordinance, 1997) and the effluent tax (Effluent Tax Act, 1976). The effluent charge, the focus of the chapter, was introduced in 1976 as a reaction to the insufficient implementation of direct regulation (Federal Water Act, Waste Water Ordinance) of effluent discharges by the water management administrations of the Federal States of Germany and the resultant non-compliance with prescribed discharge standards in the private and municipal sectors.

While the policy mix and the environment in which it acts makes it difficult to single out the impact of the effluent tax, it was found that the overall quantity and harmfulness of discharged effluents was decreased substantially since the introduction of the policy mix. Wastewater plants were upgraded to state of the art technologies, with 92.6 % of effluents receiving tertiary treatment today. As a result, the quality of water bodies increased substantially, with 85 % of all surface water bodies achieving a water quality II chemical status.

In this chapter it is illustrated that a policy mix consisting of regulatory and economic instruments can be very powerful in implementing and enforcing policies to address direct effluent emissions. However, it also shows the importance of setting the right incentive structure and discusses the factors preventing this from happening in the case of the German effluent tax. Further, enabling and disabling factor related to the implementation of the EPI are discussed, as well as the EPI’s economic, social and distributional effects on the German society. Germany’s role as pioneer in the field of environmental taxation as well as the implications of extending the policy mix to the former German Democratic Republic after Germany’s reunification in 1990 provide additional interesting angles of analysis.

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Notes

  1. 1.

    Federal Water Act (Wasserhaushaltsgesetz); Effluent Tax Act (Abwasserabgabengesetz); Waste Water Ordinance (Abwasserverordnung).

  2. 2.

    Current EU legislation has been transposed into the national legislation. As such, the Water Framework Directive has been transposed via the Federal Water Act: the Urban Wastewater Directive via the Federal Effluent Tax Act and the IPPC via both, the Federal Water Act and the Federal Effluent Tax Act.

  3. 3.

    As part of the Federalism Reform in 2006 the framework law of the Federal Water Act was amended and is now partially replaced by full regulations controlled by the federal government (concurrent legislation).

  4. 4.

    Amendments were made in 1984, 1986, 1990, 1994, 1996, 1997, 1998, 2001, 2004, 2009, and 2010. For more information, please consult Kraemer (1995): 12–20, Bundesministerium der Justiz (2005).

  5. 5.

    Adsorbable organic halogen compounds.

  6. 6.

    Chemical Oxygen Demand.

  7. 7.

    Mercury and nitrogen are chosen as representatives for heavy metal and nutrient pollutants. Additional pollutant discharges can be requested from the authors.

  8. 8.

    In the former GDR, sewage systems were in a very poor condition, if they existed at all, and were not widely available. At the time of unification in 1990, the heavily contaminated water bodies in the GDR required substantial and sustainable sanitation measures. As such, more than 2,000 treatment plants were constructed and complete industrial sectors were improved to match Western German standards (BMU 2001).

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Authors and Affiliations

  1. PricewaterhouseCoopers Private Limited, 17th Floor, Building 10 Tower C, DLF Cyber City, Gurgaon, 122002, Haryana, India

    Jennifer Möller-Gulland

  2. Ecologic Institute, Pfalzburger Strasse. 43/44, 10717, Berlin, Germany

    Manuel Lago, Katriona McGlade & Gerardo Anzaldua

Authors
  1. Jennifer Möller-Gulland
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  2. Manuel Lago
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  3. Katriona McGlade
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  4. Gerardo Anzaldua
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Corresponding author

Correspondence to Jennifer Möller-Gulland .

Editor information

Editors and Affiliations

  1. Ecologic Institut gemeinnützige GmbH, Berlin, Germany

    Manuel Lago

  2. Fondazione Eni Enrico Mattei (FEEM), Venice, Italy

    Jaroslav Mysiak

  3. Departamento de Economía, Universidad de Alcalá and IMDEA-Water Foundation, Alcalá de Henares (Madrid), Spain

    Carlos M. Gómez

  4. Madrid Institute for Advanced Studies in Water (IMDEA-Water Foundation), Alcalá de Henares (Madrid), Spain

    Gonzalo Delacámara

  5. University of Manchester, Manchester, United Kingdom

    Alexandros Maziotis

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Möller-Gulland, J., Lago, M., McGlade, K., Anzaldua, G. (2015). Effluent Tax in Germany. In: Lago, M., Mysiak, J., Gómez, C., Delacámara, G., Maziotis, A. (eds) Use of Economic Instruments in Water Policy. Global Issues in Water Policy, vol 14. Springer, Cham. https://doi.org/10.1007/978-3-319-18287-2_3

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