Economic incentives in controlling pollution in the South African leather industry

Mowat, Shaun Philip (1996) Economic incentives in controlling pollution in the South African leather industry. Masters thesis, Rhodes University.

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Abstract

The objective of the research was to ascertain whether, when compared to a system'of standards, the theoretical promise that economic incentives offered as a low cost solution to the abatement problem, would hold in practice. This was done by applying environmental economic theory to the practical problem of controlling the effluent generated by firms in the South African leather industry. It was found that in this instance the theory did indeed hold in practice. Furthermore, it was found that of the incentives discussed by the theory, marketable permits were the most economically efficient. It was however shown that a charge - not discussed in the ., theory - based on a central treatment agency's (CTA) cost of treatment offered the least cost solution to the abatement problem when the CTA could do at least some of the effluent treatment at a lower cost than the firms. - In addition a formula was developed to show the net benefits accruing to an individual firm if it undertook to treat its effluent. It was shown that in order to maximise the total benefits of treatment, a firm should treat until its net benefits of treatment were zero. A number of problem however were found to exist when the theory was applied to a practical situation. The most important was the "stepped" nature of the firms marginal abatement cost curves which meant that the setting of a charge based on a trial and error method would prove to be more difficult than the theory envisaged. Furthermore, it meant that no matter what method of pollution control was used, it would prove i~possible to reduce effluent to an optimal level. It was recommended that greater use be made of economic incentives to control all industrial effluent. It would nonetheless be necessary to do more research in this field as the theory was not tailor made for all practical situations. Further evidence of the viability of economic incentives could however encourage wider use by policy makers.

Item Type:Thesis (Masters)
Uncontrolled Keywords:Tanneries, Waste disposal, South Africa, Leather, Pollution, Economics
Subjects:H Social Sciences > HC Economic History and Conditions
Divisions:Faculty > Faculty of Commerce > Economics and Economic History
Supervisors:Antrobus, G.
ID Code:3274
Deposited By: Mrs Carol Perold
Deposited On:04 Sep 2012 13:16
Last Modified:04 Sep 2012 13:16
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