Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence from Brazil

Posted: 14 Jun 2005

See all articles by José Gustavo Féres

José Gustavo Féres

Institute of Applied Economic Research (IPEA)

Arnaud Reynaud

National Institute for Agricultural Research (INRA) - UMR LERNA

Date Written: March 2005

Abstract

This paper aims at characterizing water demand by Brazilian manufacturing plants located in Sao Paulo and at assessing the potential impacts of environmental policies on industrial water use. We first show that the price elasticity of the water demand, -1.0 on average, is high enough for a water charge to act as an effective policy tool for reducing water consumption. Results also provide some evidence of a tradeoff between water quality improvement and water conservation policies, since more stringent environmental standards may lead to a higher water demand. A joint use of environmental norms and water charges may reconcile both policy goals.

Keywords: Industrial water demand, structure of costs, environmental regulation, Brazil

JEL Classification: Q21, Q25, L5

Suggested Citation

Féres, José Gustavo and Reynaud, Arnaud, Assessing the Impact of Environmental Regulation on Industrial Water Use: Evidence from Brazil (March 2005). Available at SSRN: https://ssrn.com/abstract=741284

José Gustavo Féres (Contact Author)

Institute of Applied Economic Research (IPEA) ( email )

Av. Pres. Antonio Carlos , 51 - 17 andar
Rio de Janeiro, RJ, 20020-010
Brazil

Arnaud Reynaud

National Institute for Agricultural Research (INRA) - UMR LERNA ( email )

21, Allee de Brienne
31000 Toulouse
France

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