Would waste management and water pollution control benefit from greater use of economic instruments?
In the areas of waste management and water pollution, considerable progress in achieving policy targets has been made over the past decade. While the authorities have examined the cost-effectiveness of measures to achieve targets in these areas, greater use of cost-benefit analysis could help. Water quality has improved quite markedly in a number of water bodies and concentrations of pollutants are low in comparison with many OECD countries. However, diffuse pollution from agriculture remains a problem in many rural areas. Reducing agricultural support and introducing a tax on farms’ nutrient balances would avoid such a problem if the new policy of direct payments to farmers does not have the envisaged effects. Waste management policy has led to a large share of municipal waste being recycled. In promoting recycling, the authorities should determine an upper limit on recycling cost premia, based on the cost of incineration and the avoided production externalities, so that recycling occ
