Publications / Research Papers
The Water Load Fee of HungaryUse of Economic Instruments in Water Policy 2015 - books, chaptersPublished: 21 of September, 2015

The chapter reviews the operation of and experience with the Water load fee (WLF) introduced in Hungary in 2004. The WLF is an effluent charge imposed on industrial facilities and wastewater utilities that discharge their effluents directly into surface water. This instrument supplements a command and control regulation that sets pollution limits and imposes fines in case of non-compliance. The chapter inspects the interaction of the two instruments, while also assessing their institutional background. The latter is important in understanding how the evolving institutional structure within a transition economy puts limits to developing efficient EPIs, while the conflicting goals and priorities of the stakeholders can further distort the design and operation of the instrument. The allowance provision of the WLF offers an example of a ripple effect generating inefficient allocation of investment resources in the adjoining market of laboratory services. The case provides an example for the different roles an EPI can play in environmental policy as a regulatory instrument to influence behaviour or an instrument to raise revenue for further defined goals based on environmental principles.

Available at the publisher's website