ASi" kUCTURE FlOR DEVELOPMENT

found that although households were unwilling to scarcity levels (particularly in agriculture) and linkpay
for the delivery of conventional sewerage ser- ing price to usage are important first steps in dealvices,
only modest subsidies would be required to big with water scarcity as wel as with problems of
achieve relatively high levels of coverage with ven- salinization, micreasing fluoride concentrations,
tilated improved pit (VIP) latrines.
and land subsidence. Influencing demand through
During the 1980s the Orangi PNlot Project in pncing allows the user to decide how much water
Karachi, Pakistan, mobilized poor people to con- to use and how to achieve conservation.
struct, finance, and maintain their own water-borne
sewers. This action resulted in the provision of sew- Regulation
erage to 600,000 people at a cost of less than $50 per
household. The low cost was due to innovative Regulation is an additional means of reducing adtechnical
solutions combined with a participatory verse environrmental consequences. It is also imporapproach-
in which corruption was reduced and tant for securing infrastructure service delivery that
communuties contributed their own resources. A meets public safety requirements. The two principal
similarstory comes from northern Brazil, where the regulatory approaches are command-and-cntrol
use of technically innovative condominial sewer- measures and regulation based on economic incenage-a
collective connection system provided by tives. Command-and-control measures-direct regcommunity-based.
organizations-lowered capital ulation along with monitoring and enforcementsys
costs by up to 40 percent over conventional systems. tems-are by far the most widely used technique in
developing countries. An advantage is that they
Motivation of user effiency
provide the regulator with a degree of certainty
about for example, how much pollution levels will
Efforts to mitigate environmenl impacts through be reduced. But they have the disadvantage of proconsumer
investments in energy savig are ham- viding little incentive for innovation in pollution
-. -pered by the low consumer pices and subsidies de- control technology once standards are achieved. In
sca-bed in Chapter 2. On average, developing coun- recent years, many countnes have also adopted ecotries
use 20 percent more electricLty than they would nonic instruments. Setting prices to reflect full costs
if users paid the incremental cost of supply. Once (the "polluter pays- principle) is the most powerful
economic pricing .is established, governments are and obvious of such instruments. In some countries,
able to promote the use of more energy-efficient. epeimentsareunderwayusingadditional.regulatechnologies,
tory instruments, such as pollution charges, nar-
Smilar price increases are merited in transport ketable permits, subsidies, deposit-and-return sysbut
are more difficult to implement. Cars using city tems, and enforcement incentives, to introduce
centers at rush hour impose congestion costs many more flexibility, effidency, and cost-effctiveness
times higher than they do. in off-peak periods, and into pollution control measures. Some of these efthe
environmental costs of vehide use are greater in lorts appear promising.
urban than in rural areas. Urban car users can be Environmental regulation begins by specifying
made aware of such costs through the introduction abatement standards based on the technical options
of parling fees, area licensin& and tolls Growng available For example, for power generation, techenvironmental
consciousness and technological nologies are emerging that effectively reduce noxchange
are likely to increase the use of tolls and fees ious pollutants from coal-regulation can thus subin
the near future, which will encourage travelers to stantially reduce emissions. But clean technologies
use public tansit or nonmotorized modes.
almost always add to the cost of coal-fired thermal
Important user efficiency prblems in the water power (by 10 to 20 percent on capital costs and 5
sector stem from the underpricing of water Domes-. percent on operating costs). Consequently, such
tic consumption, sanitation; irrigation, hydroelec- technologies are still far from universally used in
tric generation, and transport all create water de- developing countries. Where switching to gas is an
mnands and raise problems of overall .supply and economically viable altemative, there are many ensectoral
allocation. In India in 1985,94 percent of all vironmental advantages. Poland provides an examwater
used went to agriculture Conflicts betweenf ple of market-based incentives to reduce noxious
industry and irigation have emerged in some emissions. Its National Environment Fund, setup in
areas, and in cities such as Bombay, Delhi, and 1980, levies charges on all polluters and imposes
Madras problems of water scarcity have aisen. In additional fines on owners of indushies that violate
many countries, aising the price of water to reflect region-specific abatement standards The proceeds
83