The Protection of the Capacity for Resilience in the Provision of Drinking Water from Hybrid Environmental Policy Instruments

John Harvey Vargas-Cano, David Tobón-Orozco and Carlos Vasco-Correa ()
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John Harvey Vargas-Cano: Grupo Enseñanza de las Matemáticas y la Computación EMAC, Instituto de Matemáticas, Universidad de Antioquia UdeA, Medellín 050010, Colombia
David Tobón-Orozco: Grupo Microeconomía Aplicada, Departamento de Economía, Facultad de Ciencias Económicas, Universidad de Antioquia UdeA, Medellín 050010, Colombia
Carlos Vasco-Correa: Grupo Microeconomía Aplicada, Departamento de Economía, Facultad de Ciencias Económicas, Universidad de Antioquia UdeA, Medellín 050010, Colombia
Authors registered in the RePEc Author Service: Carlos Andrés Vasco Correa () and David Tobón Orozco

Sustainability, 2023, vol. 15, issue 11, 1-17

Abstract: The use of hybrid environmental policy instruments is an open research topic, particularly in the case of water resources protection. We analyzed the influence of hybrids between command-and-control regulation (CAC) and environmental taxes where the body of water’s capacity for resilience and drinking water supply are critically affected by pollution accumulation over time. We used a general equilibrium model in which it is assumed that a representative company pollutes water bodies with its production and can use pollution abatement technologies to comply with environmental regulations. These water bodies are used by a public utility that provides drinking water to the economy. This paper focuses on the review of the Colombian CAC environmental regulation, which moved from controlling a percentage of pollution to defining specific amounts of pollutants discharged, and its interaction with an environmental tax, which makes it a hybrid policy. Although the new CAC is stricter in principle, we conclude that for different values of the model parameters, a hybrid environmental policy requires periodic revision of pollutant discharge limits as well as a complementary environmental tax that approximates the Pigouvian tax to ensure water bodies’ resilience.

Keywords: resilience; water pollution; drinking water; general equilibrium; pollution permits; taxes; hybrids (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:11:p:8649-:d:1156717

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