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http://dx.doi.org/10.15266/KEREA.2015.24.1.165

Relationship Between Environmental Infra Operating Cost and Polluter Pay Principles  

Kang, Heechan (Dept. of Economics in Incheon National University)
Kang, Sung Won (Korea Environment institute)
Kim, Minjoon (Korea Environment institute)
Publication Information
Environmental and Resource Economics Review / v.24, no.1, 2015 , pp. 165-187 More about this Journal
Abstract
In this paper, we tested if the sewage subsidy from Korean Water Management Fund discourage sewage fee increase by Korean local governments, and consequently hinder water quality improvement. To examine this counter-incentive effect of Water manage Fund sewage subsidy, we estimated the effect of sewage subsidy on the ratio of sewage fee revenue to environmental treatment facilities' operation cost of local governments in 2009-12, using two-stage least square estimation. We found that the sewage subsidy has negative effect on the sewage fee revenue to sewage operation cost ratio. But, the statistical significance of this effect was sensitive to model specification. And the size was too small to conclude that the counter-incentive effect was economically significant.
Keywords
Water Management Fund; Polluter pay principles; Consumer pay principle; Environmental treatment facility; Sewage fee;
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