Over the past three decades, Taiwan has taken rapid and remarkable strides in the field of economic development. Rapid industrial growth has at the same time caused serious deterioration in the environment which must be restrained to ensure future economic growth. One of the most serious environmental problems in Taiwan today is water pollution. Restraining future pollution and improving the present quality of water is necessary to maintain a better environment for advanced economic growth.
The government has not been negligent of this problem. During the past several years, a series of Acts, based primarily on the regulation-prohibition scheme, and mainly directed against the discharge of wastewater into rivers, has been promulgated. Until now, however, these acts have been largely ineffective.
This is a case study analysis of the Chi Shui Ch’i Basin located in Southern Taiwan. There are many large industrial plants in the upper reaches of the basin whose discharges of wastewater have caused uncompensated damages to the fishermen in the lower reaches and delta areas downstream. These fishermen have been important suppliers of milkfish, oysters and clams for a long period of time.
The main purpose of this study is to introduce an effluent charge scheme to control the emission of wastewater. An Avoidance-Avoidance Model was formulated to determine the optimum treatment level of wastewater, subject to the constraints involved in minimizing the total social cost of wastewater. The total social cost includes the disposal cost (treatment cost) and the continued damages to fishermen produced by the remaining, untreated wastewater emissions.
In addition, a paretean analysis enabled us to understand the unity rate of the effluent charge which pollutors must pay for the continued discharge of untreated wastewater. The greatest advantage of this approach is that the total cost of water pollution can be minimized, that is the cost of eliminating wastewaters and the damages suffered by fishermen can both be minimized as well.
Since production entities seek to maximize profits, the cost of wastewater disposal must be accounted for. This includes the burden of the treatment cost and the payment of the effluent charge for untreated emissions should continued discharges occur. Pollutors should have adequate incentive to consider the external cost as their internal cost because consideration would have to be given to the disposal cost of wastewater as compared to the free emission system. Because the external cost of water pollution can be internalized, the problem of water pollution can be resolved.
This study is an economic analysis of water pollution control. From the · supply side, we used the Engineering Simulation Approach to estimate the treatment cost of water pollution control. From the demand side, we used an Economic-Ecological Model, developed by the author, to estimate the level of reduced damages to the fisheries once water pollution control is begun.
The control of water pollution is a complex process involving political, economic, ecological, social and legislative factors. The need for water pollution control varies from place to place and over time. Our findings indicate that from the economic aspect, effective and efficient water pollution control, at least in the area under study, is available through a mixed policy approach combining regulation and the effluent charge scheme.
