CONCEPTUAL FRAMEWORK AND REVIEW OF...

Conceptual framework and Review of Literature

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CHAPTER II

CONCEPTUAL FRAMEWORK AND REVIEW OF LITERATURE

2.1 Conceptual framework

The definition of some of the important concepts used in the study would help in

the proper understanding of analysis and discussion, of the problem in hand. It is with

this view in mind; an attempt is made to define some of the concepts used. In doing so,

various standard works on the subject have been referred.

2.1.1 Environment

The term environment refers to the quantity and quality of natural resources, both

renewable and non-renewable. It includes the ambient environment, which consists of the

landscape, water, air and the atmosphere, and is a crucial determinant of human quality of

life, as well as supporting human life. The state of the environment is a critical

determinant of the quantity, quality and sustainability of human activities.

2.1.2 Pollution

Pollution is any unfavorable change in the physical, chemical or biological

characteristics of air, land and water that may or will harmfully affect the living condition and

cultural aspects or that may or will deteriorate raw material resources (Irving sax 1974). It is

the substance that gets into environment, private or public, in physical, chemical or

biological characteristics of air water and land that may or will harmfully affect life in the

planet.

2.1.3 Environmental pollution

The environmental pollution arises when residual materials of economic activities are

returned to the environment. This is because by nature environment has the capacity to

assimilate and at the same time degrade the waste material, which it receives, and convert them

into harmless or even useful forms. Sewage, for instance, up to a certain concentration is

rapidly degraded by bacteria and made it harmless and is utilized as food by organisms.

Once the assimilative capacity is exceeded, detrimental effects follow from further receipt of

waste and that is the beginning of pollution (Burrows Paul, 1979).

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2.1.4 Air pollution

Air Pollution is contamination of the atmosphere by gaseous, liquid, or solid

wastes or by-products that can endanger human health and the health and welfare of

plants and animals, or can attack materials, reduce visibility, or produce undesirable

odours. Air pollution has now been one of the major problems faced by every country

worldwide. The reason begin centered on the increase use of fossil fuels over the past five

or so decades and to some extent increased cement, nitric and sulphuric acid production,

all these brought about by industrial revolution. The level is usually given in terms of

atmospheric concentrations (micrograms of pollutants per cubic meter of air) or, for

gases, in terms of parts per million, that is, number of pollutant molecules per million air

molecules. Each year industrially developed countries generate billions of tons of

pollutants.

2.1.5 Water pollution

Water pollution is the contamination of water bodies (e.g. lakes, rivers, oceans

and groundwater). Water pollution occurs when pollutants are discharged directly or

indirectly into water bodies without adequate treatment to remove harmful compounds.

Water pollution affects plants and organisms living in these bodies of water; and, in

almost all cases the effect is damaging not only to individual species and populations, but

also to the natural biological communities.

2.1.6 Soil pollution

It is caused mainly by unreclaimed wastes. Industries contribute to chemical and

thermal pollution. Litter and garbage from urban areas contain high proportions of

non-biodegradable plastic material, highly toxic factory effluents are often dumped into

pits which cause great damage. Soil is a living organic layer in dynamic equilibrium with

and continually being replenished by rocks beneath it and air above it. Soil pollution

affects in many ways. Industrial effluents leave residues in the soil impoverishing

microorganisms which contribute to the ecology. The delicate chemical balance in the

soil is thus disturbed. (Meenakumari and Balakrishnan Nair, 1996).


http://en.wikipedia.org/wiki/Water

http://en.wikipedia.org/wiki/Lake

http://en.wikipedia.org/wiki/River

http://en.wikipedia.org/wiki/Ocean

http://en.wikipedia.org/wiki/Groundwater

http://en.wikipedia.org/wiki/Pollutant

http://en.wikipedia.org/wiki/Water_treatment

http://en.wikipedia.org/wiki/Bodies_of_water

http://en.wikipedia.org/wiki/Species

http://en.wikipedia.org/wiki/Biocoenosis


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2.1.7 Effluent

Effluent in the artificial sense is generally considered to be water pollution, such

as the outflow from a sewage treatment facility or the wastewater discharge from

industrial facilities. An effluent pump, for instance, pumps waste from toilets installed

below a main sewage line. In the context of waste water treatment plants, effluent that

has been treated is sometimes called secondary effluent, or treated effluent. This cleaner

effluent is then used to feed the bacteria in bio-filters.

2.1.8 Dyeing

Dyeing is the process of adding color to textile products like fibers, yarns, and

fabrics. Dyeing is normally done in a special solution containing dyes and particular

chemical material. After dyeing, dye molecules have uncut chemical bond with fiber

molecules. The temperature and time controlling are two key factors in dyeing. There are

mainly two classes of dye, natural and man-made.

2.1.9 Bleaching

A bleach is a chemical that removes colors, whitens, or disinfects, often via

oxidation. Common chemical bleaches include household chlorine bleach (a solution of

approximately 3–6% sodium hypochlorite, NaClO), oxygen bleach (which contains either

hydrogen peroxide or a peroxide-releasing compound), and bleaching powder (calcium

hypochlorite).

2.1.10 Water Contamination

Impairment of water quality to a degree that reduces the use ability of the water

for ordinary purposes or creates a hazard to public health through poisoning or by the

spread of diseases.

2.1.11 Averting cost

Averting expenditures are expenditures undertaken to reduce the level of

discomfort arising from externalities.


http://en.wikipedia.org/wiki/Water_pollution

http://en.wikipedia.org/wiki/Sewage_treatment

http://en.wikipedia.org/wiki/Wastewater

http://en.wikipedia.org/wiki/Sump_pump

http://en.wikipedia.org/wiki/Waste_water_treatment_plants

http://en.wikipedia.org/wiki/Bacteria

http://en.wikipedia.org/wiki/Biofilters

http://en.wikipedia.org/wiki/Textile

http://en.wikipedia.org/wiki/Fiber

http://en.wikipedia.org/wiki/Yarn

http://en.wikipedia.org/wiki/Fabric

http://en.wikipedia.org/wiki/Solution

http://en.wikipedia.org/wiki/Dye

http://en.wikipedia.org/wiki/Material

http://en.wikipedia.org/wiki/Molecules

http://en.wikipedia.org/wiki/Chemical_bond

http://en.wikipedia.org/wiki/Temperature

http://en.wikipedia.org/wiki/Natural_dyes

http://en.wikipedia.org/wiki/Dyes

http://en.wikipedia.org/wiki/Oxidation

http://en.wikipedia.org/wiki/Sodium_hypochlorite

http://en.wikipedia.org/wiki/Oxygen_bleach

http://en.wikipedia.org/wiki/Hydrogen_peroxide

http://en.wikipedia.org/wiki/Calcium_hypochlorite




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2.1.12 Defensive cost

Expenditures are mitigating the impacts of environmental damage. One problem

with defensive expenditures is in identifying how much of the expenditures is for

protection of the environment, and how much is for other improvements in the quality of

life generally.

2.1.13 Common Property Resource

Common property resources are those resources where a well delineated group of

competing users participates in extraction or use of a jointly held fugitive resource.

The resource is accessible to the group of co owners who are usually the members of

some community or village. No individual has exclusive property rights i.e., CPR is

subject to individual use by not to individual possession. Also, they are not subjected to

free or open access (Tietenberg, 1996).

2.1.14 Household

A household is usually a group of people who normally live together and take

their meals from a common kitchen unless the exigencies of work prevent any of them

from doing so. Persons in a household may be related or unrelated or a mix of both.

However, if a group of unrelated persons live in a census house but do not take their

meals from the common kitchen, then they are not constituent of a common household.

Such person was to be considered as a separate household. The important link in finding

out whether it was a household or not was a common kitchen. The may be one member

household, two member households or multi-member households (Census 2001).

2.1.15 Principle source

If a household obtained potable water from the same source throughout the last

365 days, then that source was treated as the principle source (NSSO, 54th round 1998).

2.1.16 Supplementary sources

If a household during the last 365 days, obtained potable water from more than

one source, then the one most commonly used was treated as the principle sources and

the next one (in terms of frequency of use) was treated as the supplementary sources

(NSSO, 54th round 1998).



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2.1.17 Grazing land or pasture land

This is a well-defined category of land in the classification used in official land-

use records. Traditionally, grazing and pasture land has been the most important

constituents of CPR land. Many villages have land earmarked as permanent pasture

land/grazing land. These are variously known as gauchar, gochar, gairan, gomol, etc.

Villages have user right on permanent pasture by legal sanction. Village woodlots, which

may have come up on the grazing land/pasture land, were not considered under this

category.

2.1.18 Stand post

The term source tap was used to refer to the supply of water to households

through pipe after suitable treatment, if required, by corporation, municipality, panchayat

or other local authorities or any private or public housing estate or water treatment

agency. (NSSO, 54th round, 1998).

2.1.19 Hand pump

Hand pump used commonly in rural area, water pumped up and supplied without any

treatment, or transported by pipe, untreated from river and well. (NSSO, 54th round, 1998).

2.1.20 Biological oxygen demand (BOD)

It is expressed as weight of oxygen consumed per unit volume of water during a

defined period of time at a defined temperature.

2.1.21 Common effluent treatment plant (CETP)

In the common effluent treatment plant, the effluents from the different industries were

treated using one universal treatment system. Common effluent treatment plants eliminate

duplicity of treatment systems among the industries of the industrial estate and hence results in

a reduction in the total capital required for construction of the industrial estate.

2.1.22 Electrical conductivity (EC)

It is the measure of the ability of an aqueous solution to convey an electric

current. This ability depends upon the presence of iron, their total concentration, mobility

and temperature.



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2.1.23 Reverse osmosis (RO) system

The main function of RO is recovery of pure water from the effluent for reuse in

textile wet processing operations.

2.1.24 salinity

The concentrate of salt (especially sodium chloride) in water.

2.1.25 pH

It is defined as the logarithm of the activity of hydrogen iron with negative sign.

pH is the simple test to measure the H+ ion concentration in water enhance the acidity and

alkalinity of the solution. However, the result must be and together with the CO2 and

bicarbonate to giver correct picture.

2.1.26 Conductivity

Conductivity is more exact than PH. However, different ions have different power

of conveying current. In addition, it gives exact knowledge of water if known ions are

present. Otherwise, it is given apparent strength of the dissolved solids.

2.1.27 Total suspended solids (TSS)

Total Suspended solids are the portion of solids that usually remains on the filter

paper. They consist of silt, clay, fine particles of organic and in organic matters, which is

regarded as a type of pollution, because water high in concentration of suspended solid

may adversely affect flora and fauna.

2.1.28 Total dissolved solids (TDS)

It is the measure of total inorganic salts and other substances that are dissolved in

water.

2.1.29 Zero discharge system

It is meant to treat all the incoming effluents, and leave nothing behind. The main

aim is to recover usable water and salt from the effluent and minimize the generation of

waste. So that it can be safely stored on site and can prevent the discharge from spoiling

the environment.



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2.2 REVIEW OF LITERATURE

In this chapter an attempt has been made to review the previous studies related to

water pollution impact, cost and related issues. Though the number of studies on

economics impact of pollution is limited, available studies facilitate an insight as to how

pollution economically affects the human health, vegetation, animal health, water quality

and supply. To get better insights, the chapter is being discussed here on the following

heads.

2.2. Empirical status of water pollution

2.2.1 Impact of effluents of textile industries on agriculture

2.2.2 Impact of effluents on human health and animal health

2.2.3 Impact of effluents of drinking water

2.3 Models related to present study

2.3.1. Externalities

2.3.2 Hedonic regression model

2.3.3. Damage cost models

2.3.4 Contingent valuation methods

2.2.1. Impact of effluents of textile industries on agriculture

Sacchidananda Mukherjee and Prakash Nelliyat (2007) observed that continuous

disposal of industrial effluents onto the land, which has limited capacity to assimilate the

pollution load, has lead to ground water pollution. A case study in Mettupalayam taluk,

Tamilnadu identified that ground water quality of shallow open wells has deteriorated in

the areas surrounding the industrial locations, and the use of polluted ground water for

irrigation has increased the salinity contents of the soil. Hence the farmers in this study

area have already shifted their cropping pattern to salt tolerant crops viz. Jasmine,

Tobacco, etc., and substituted their irrigation source from shallow open wells to deep

bore wells and /or to river water. More over the study observed that with the rise in

concentration of electrical conductivity of ground water, revenue from banana cultivation

has gone down.



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Velayutham Saravanan (2007) attempted to analyze, in a historical perspective

(1881-2002), the emergence of competing demand for water, caused by the diversion of

river basin water to meet the demand of the urban domestic use and industrial needs and

its consequential damage to the ecology and environment, which further aggravated the

problem, in the Bhavani and Noyyal river basins of Tamilnadu. It examines the diversion

of water for the domestic and industrial sectors that caused a great threat to the ecology,

environment and health of the people and to the flora and fauna of these regions, which

further aggravated the competing demand situation leading to 'water market' in the basin

areas. Further, it also analyse the role of the state, how it further promoted the competing

demand for water, thereby neglecting the ecology and environment of these river basins.

On one hand, it provides water to the pollution causing industries by diverting water from

the river basins, where there is already an acute scarcity of water. On the other hand, the

diverted water is polluted due to the ineffective pollution control measures of the state,

further aggravating the situation with competing demand for water and worsening the

environmental conditions in the river basins. In short, this article examines the

proliferation factors for water demand creating competition in the basin areas and the

consequence of environmental damages that not only created 'water market' but also

posed great threat to the ecology, environment and people in the Bhavani and Noyyal

river basins of Tamil Nadu since the late 19th century up till the early years of the

21st century (1881-2002).

Srinivas et al. (2006) reported that the effects of untreated effluents of small and

medium scale industries discharged into the river Kahari in Ahmedabad district. This has

resulted in contamination of ground water up to the depth of 183 meter. About 110 villages

of downstream areas were consuming polluted potable water for 20 years. The water

pollution has generated a variety of social problems for the people. The study disclosed

that for more than two decades the people have been suffering from health related

problems which include skin diseases, stomach and internal ailments and bronchial

problems. Deteriorating soil fertility has had an impact on agricultural produce, which in

turn reduced income of the farmers. Moreover livestock casualties and reduction in milk

yield have adversely affected the village economy.



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Ratna Reddy and Bhagirath Behera (2006) assessed the economic costs of water

pollution (industrial) to the rural communities in terms of losses to agricultural

production, human health, and livestock. The cost estimates are based on the detailed

primary (household level) data collected from an intensive study of two villages–one a

pollution-affected village and the other a village unaffected by pollution located in one of

the industrial belts in Andhra Pradesh, South India. The cost estimates revealed that the

impact of industrial pollution on rural communities is quite substantial in monetary terms.

The paper argues that the compensation principle might work if the estimates of damage

are realistic. Further, the amendment of laws and creating institutional structures are

necessary but not sufficient to address the environmental problems. Policies should be

implemented in their right perspective. Institutions should be strong enough, with more

autonomy and powers, to deal with the problems at hand.

Phiri et al. (2005) analyzed the extent of pollution in a receiving river affected by

industrial effluents. The study shows that the effluents from the industries had a

significant impact on the water quality of the receiving river. The results of the study

shows effluents were very acidic in both dry and rainy season. The water, beyond the

receiving points was acidic and the level of the other parameters was high, especially, at

downstream level. The dissolved oxygen, alkalinity, suspended solids, and chloride were

relatively high. The study stated that the effluents that were being discharged into the

river have considerable negative effect on the quality of the water in the river and as

such, the water was not good for human use and agricultural work. The study suggested

that there was a need to install treatment plant for all industrial works.

Chellappan Sekar (2003) in a study in Tamilnadu found that where the pollution

of ground water is high due to industrial effluent, the water resources had resulted some

external effects on land quality; land value, crop yield, loss of man power, employment

etc. The externalities caused by the changes in the qualities of water resources due to

mismanagement and misuse included the common health disorders. Farmers had incurred

a total amount of Rs. 518 per annum per household consulting fees for medical doctors

and cost of medicine and loss in time and management, reduction in animal population,

poor health status, reduction in milk yield was the external effects on animals due to



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degradation of ground water. Land selling, diversion of farm lands for non-agricultural

activities, labour movements towards non-farm sector and poor economic status where

the consequences of pollution externalities observed.

Udayasooriyan and Prabu (2003) conducted a study to assess the impact of

continuous effluent discharge of paper industry on irrigation of soil and on ground water

in the Cauvery river basin. The study had found that the paper mill effluent had increased

the soil pH, electrical conductivity in irrigated soils. The potential salinity of the ground

water in effluent irrigated field had increased three times over control limit and the values

crossed the safer limits in many places indicating that the ground water was polluted with

chlorides and sulphates.

Patel and Pandya (2003) studied the sustainability of industrial effluents for

irrigation in an industrial zone of Gujarat and it revealed that the industrial effluent

collected from different cities were found contaminated with all major polluting

elements. It contained high level TSS, COD, BOD, and the higher standards permissible

limit for irrigation. The well water also had shown salinity and alkalinity hazardous.

Nagaraj et al. (2003) who conducted a study in Vrisabavati river basin in

Bangalore, identified that poor quality ground water resulted in lower yield of crops.

The productivity of rice had decreased by 62 percent and sugarcane yield decreased by

47 percent in the affected farms compared to normal farms. The field irrigated with

polluted water is loaded with heavy metals like ferrous, and manganese causing

hardening of soil. Upon irrigating polluted water to the vegetables, oilseeds, maize and

pulses the symptoms of wilting and finally crop losses were observed as these crops are

salt sensitive.

Malik and Negi (2003) studied the impact of distillery industry effluent on water

quality and phytoplankton of rivers. The study revealed that distillery effluent contains a

large amount of dissolved organic matter and causes a severe damage to actuary life.

The abundance of phytoplankton has been affected by the highly polluted condition of

river as indicated by decreasing trends in phytoplankton in the study areas.



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Lutzenhiser (2002) mentions that human institutions and systems, human

cooperation and conflict, human actions and interactions, which are considered as the

regular processes of human society, have ultimately shaped, managed, dominated,

polluted, overexploited and sometimes destroyed the natural environment for a selfish

mode of production.

Jothimani and Baskaran (2002) carried out a study to elucidate an appropriate

dilution of dyeing factory effluent for irrigation of agricultural crops and to assess the

changes in soil, electrical conductivity and organic carbon during dyeing factory effluent

on irrigation. The results of the study showed that the effluents could be safely used for

irrigation at proper dilution.

Roberton Williams III (2002) indicates that interactions with the tax-distorted

labor market increase the cost of pollution regulation. However, these studies make

restrictive assumptions regarding preferences and ignore key links between pollution,

human health, and labour productivity. Together, these assumptions imply that pollution

does not affect labor supply. This paper developed an analytical general-equilibrium

model that considers several potential benefits from reduced pollution, including

improved health or productivity. It shows that these benefits affect labour supply and thus

create a benefit-side tax-interaction effect that can be of the same magnitude as the familiar

cost-side interaction. When reduced pollution boosts labor productivity, the effect

substantially magnifies such benefits. In contrast, when pollution affects consumer health, the

effect tends to diminish the benefits of reduced pollution. The paper considered only

environmental regulation, but these concepts apply equally to other policies affecting

productivity or health, such as research subsidies or occupational safety regulations.

Fazeli et al. (1998) analyzed the effects of the irrigation by the effluents

discharged by the nearest paper mills in Nanjungud of Mysore district, Karnataka.

The study observed the accretion of heavy metals in the soil and different parts of the

paddy crop. The study had recorded above tolerance limits set by Indian standards.

There was a greatest accumulation of metals in the leaves and roots of crops the study

suggested that since in many tropical countries the common diet of people is rice, the

accumulation of toxic heavy metals in rice may lead to health disorders.



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Rao et al. (1993) conducted a study in the Bandi River for assessing the impact of

textile industrial effluents on agricultural land. The investigated study found that the

effluents were highly saline, coloured and solid in nature resulting in the river and well

water unsuitable for irrigation. The biological activity of the discharge of effluents of

textile mills posed a serious threat to the health of these helpless farmers and their crops.

To investigate the effect of land use on water quality, selected physico-chemical

parameters, temperature, velocity, total alkalinity, total phosphate, chloride was analyzed

during monsoon and post monsoon periods.

Yadav et al. (1990) observed that the need for treated effluent water for

agricultural land explained that there is an urgent need to utilize the alternate sources of

water for agriculture in order to meet the demand. According to him increasing

industrialization and urbanization is resulting in the need for safe disposal of waste water.

Good quality of water is inadequate for normal living as it is getting polluted due to

industrial discharge including those of paper, textile, tannery, distilleries and other

industries. He suggested that efforts should be made in future for proper treatment and

safe disposal of industrial effluents and use in agricultural land in order to increase our

food grain production and enhance the environment quality.

Venkataramani (1987) states in his article “Slow Poisoning” as to how effluents

from tanneries in North Arcot district, Tamilnadu ruin the land and people, Two decades

ago Vaniyambadi was one of the Tamilnadu richest agricultural areas but due to tannery

pollution major land areas have been converted into a vast barren tract. The number of

families dependent on agriculture was 24000 two decades ago, but now it is reduced to

8000. Cultivable land in the taluk has declined from 68000 hectares to 22000 hectares.

Besides, an estimated 2000 potable water wells in the taluk have turned repugnantly

brackish (only 30 wells produce tolerable quality water).The negligence of the tanneries

led to many health problems such as respiratory disease, and even menstrual problem for

women.

Sreenivasan et al. (1984) report in their work that the effluents discharged from

the tanneries located in North Arcot District have caused serious deterioration in the

quality of ground water. The effect of various pollutants manifested on the crops as



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stunted growth, poor germinated staining, leaf bur, poor quality of grains, fruits etc.

In fact most of the farmers have stopped cultivating crops like paddy and sugarcane, and

have taken to raising moderately resistant crops like maize and ragi.

Eiswirth et al. (2004) “Balancing the contaminant input into urban water

resources,” with over 40% of the water supply of Western and Eastern Europe coming

from urban aquifers, efficient and cost-effective management tools for this resource are

essential to maintain the quality of life. However, the increasing concerns about the

environmental impacts of water projects and their increasing economic costs mean that

traditional planning concepts, which assume unlimited supplies of potable water, must be

questioned. This includes the source of the water supply and its appropriate use. Urban

transport systems and the provision of water have been identified as the most critical

factors that determine the future of cities in this century. The objective of an

interdisciplinary research project presented in this research is to identify and develop

systems and technologies and integrate processes and analytical tools, which are

commercially valuable, scientifically robust and which improve the cost effectiveness of

urban water services, in line with the program’s vision of ecological sustainability.

As part of this program, a software tool has been developed to estimate the water flows

and contaminant loads within the urban water system. This paper presents first modeling

results of water and contaminant flows through the existing urban water, wastewater and

storm water systems, from source to discharge point.

2.2.2 Impact of effluents on human health and animal health

Usha Gupta (2008) in a study estimated the monetary benefit to individuals from

avoidance of health damages if air pollution is reduced in the urban industrial city of Kanpur

in India. A notable feature of this study is that it uses data from weekly health-diaries

collected for three seasons. For measured monetary benefits, the study considers two major

components of health cost that is incurred due to adverse effects of air pollution on health i.e.,

the loss in wages due to workdays lost from work and the expenditure incurred on mitigating

activities. The study estimated that a representative working individual from Kanpur would

gain Rs. 165.47 per year if air pollution were reduced to a safe level. The extrapolated annual

benefits for the entire population in the city are Rs. 224.55million.



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Mark Dickie et al. (2007) has highlighted the problem faced by the young

children due to environmental hazards which has become a worldwide priority in

government policies to improve human health. Effectiveness of these measures depends

on the parents who take steps to keep the children out of harm. Special protection of

young children from environmental hazards has become worldwide priority of

government policies to improve human health. The fundamental tension between

humanity and self interest of families looms as a crucial behavior factor determining the

effectiveness of these policies.

Pandey (2006) stated that chief sources of water pollution are sewage and other

waste, industrial effluents, agricultural discharges and industrial wastes from chemical

industries, fossils fuel plants and nuclear power plants. They create a larger problem of

water pollution rendering water no longer fit for drinking, agriculture and, as well as for

aquatic life. More than 2.6 billion people i.e., 40 percent of the world’s population – lack

basic sanitation facilities and over one billion people still use unsafe potable water

sources. As a result thousands of children die every day from diarrhoea and other water,

sanitation and hygiene related diseases and many suffer and are weakened by illness.

Myrick Freeman (2006) provided an overview of some of the issues involved in

comparing benefit-cost and cost-effectiveness analysis based on quality adjusted life

years as alternative approaches to assessing environmental policies that affect human

health. This study concludes that (i)although quality adjusted life-years have the

advantage of reflecting policy impacts on both health status and longevity in a single

scalar measure, they are not consistent with utility theory unless individuals’ preferences

satisfy some restrictive conditions; (ii) they do not capture other important aspects of the

valuation of changes in mortality and morbidity (iii)cost effectiveness analysis based on

quality adjusted life years as a measure of effectiveness omits non-health related effects

of environmental regulation is appropriate.

Purnamita Dasgupta (2004) states that environmental pollution affects human

health and well being in several ways. Medical expenses associated with treatment costs

of pollution induced diseases, lost wages, defensive expenditure to prevent the

occurrence of pollution – induced illness, disutility arising from the illness due to loss on



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exposure to pollution are all economically quantifiable aspects of environmental health.

Water and disease are closely related. Ensuring adequate supplies of safe water sources is

therefore of paramount importance in relation to both environment and health issues.

While there are several dimensions to the development process and its linkages with the

ecosystem, the impact of rapid urbanization has become an all important aspect of the

development process. Rapid urbanization creates pressures for provision of adequate

infrastructural services such as water supply, sanitation and waste disposal.

Govindarajalu (2003) analyzed the health status of the people residing on the

Noyyal river basins to identify the impact of the water on health status, 3 health camps

were conducted at 3 centers on different dates, 20 villages of which 1120 villagers attended

the camps. It was identified the 31.65 percent of the patients were suffering from skin allergy

problems,22.56 percent of the patient had respiratory problems, 13.13 percent general

allergy, 10.44 percent had joint pain and 7.07 percent ulcer problems.. It was medically

accepted that the polluted water had significant influence on these diseases. It was

assessed that one fourth of the villagers had any one of these listed diseases. Most of the

identified patients informed that they were using either the river or the well water or both.

Ratna Reddy and Bhagirath Behra (2002) focused on the effects of various

diseases arising out of water pollution. However it was observed in this villages that most

of the diseases are water borne, such as skin infection, teeth corrosion, joint pains, loss of

appetite, detective vision, fever, abdominal pain, respiratory diseases and diarrhoea,

general muscular weakness, stunted growth chronic cold and cough among the middle

age and children. A majority of the complaints are about the problems regarding lung

diseases and extreme weakness People get exposed to the toxic chemical water while

working in the farm, taking bath and washing clothes. This causes serious health

problems, including loss of scalp hair in women. The most important feature of the health

problem due to pollution is that women are the worst affected.

Mukul (1997) emphasized that polluting industries expose both the workers and

the environment to hazardous substances. These industries are characterized by an

inefficient use of natural resources and labour and exposure of labour to hazards.

Thus the issues of betterment of working conditions inside the industries and



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environmental protection outside it, are closely interlinked. Occupational health is an

essential part of working conditions, since most of the health problems occur among

workers exposed to unhealthy substances and dangerous situations. The awareness

regarding the inter linkages of workers’ interests, occupational health and environmental

protection is increasing, as reflected in some recent initiatives and legal interventions.

2.2.3 Impact of pollutants on potable water supply and quality

Julio Sanchez-Cho liz and Rosa Duarte (2005) made an attempt to analyze the

environmental impacts of the Spanish economy by way of water on the basis of a Spanish

Accounting Matrix for 1999. Only households were taken as an exogenous account.

The pollution measures were estimated for four categories of pollution indicators of water

(waste water, nitrogen, metals and biological oxygen demand (BOD). The environmental

data base was obtained from the Spain Statistical Institute. The analysis reveals that

pollution in Spain was closely linked to food production, energy, extractive industries and

paper manufacturing. They show that services, taken as a whole, are major polluters,

though this is due to the volume of household expenditure they represent rather than their

pollution potential as such. They also show that the Spanish economy avoids a great deal

of pollution by importing inputs, which pollute where they are produced. Finally, the

study also provides per capita pollution values for the aforementioned four pollutants.

Scott farrow et al. (2005) proposed a water quality trading design that addresses

common implementation problems. The significant compliance cost analysis shows that

savings are possible without incurring a penalty in terms ages or overall water of social

dam- quality despite a higher level of discharge relative to the command and control

option.

Kristina Furn (2004) states that rural people around 4 kilo meters around the

Orathupalayam dam in southern India live in one of India’s most polluted area and hence

was taken as a study area. The people were once restricted mainly by scarcity of water

but today they cannot drink their well water or cultivate their soil. The dam, created to

store floodwater from the Noyyal River, also stores effluent water from more than 700

dyeing and bleaching industries situated in the town of Tiruppur, 20 km upstream.

Although most industries have treatment plants that do not treat total dissolved solids



36

(TDS) and thus sodium chloride becomes one of the major components of the effluent.

75 to 100 million liters of effluents are released every day. Through water sampling in

open and bore wells and with the help of GPS, Arc View and Surfer it could be

concluded that high TDS levels and concentrations of Cl, Ca2+, Mg and Na+ were

associated with the dam. A definite spatial pattern of the spreading of polluted water

could be determined. Water from the dam was fed to the ground water all around the dam

and also affected the groundwater more than 4 km to the southeast. Soil samples and

interviews with farmers made it clear that land irrigated with dam water or affected well

water soon became uncultivable. The water destroyed the soil structure and seeds did not

germinate after irrigation with polluted water. Through interviews it could be concluded

that the local people inhabiting the surroundings of the dam paid a large part of the

externalities due the polluting activities of the textile industries in terms of negative

health effects and also lost agricultural land, water resources, fishing and working

opportunities. These problems have mostly been caused by the high salinity in the

effluents but it is unclear to what extent other substances have caused or might cause

harmful effects to the environment, people and animals.

Pushpangadan (2003) examined the use of Data Envelopment Analysis (DEA) for

the estimation of the wellbeing from potable water using ‘commodities and capabilities’

approach. DEA uses the general-purpose linear programme version of the input oriented

multi-input multi-output model for the estimation taking state as the decision-making

unit. The transformation efficiency of the water characteristics into achieved capabilities

(free from morbidity rates of water borne diseases) shows that Punjab has the least

efficiency while Kerala and Orissa as the Pareto-efficient Peer states. The major reason

for the input use efficiency in Kerala may be due to the cultural practice of boiling

potable water before consumption. In the case of Orissa, it can be attributed to better

hygienic water handling practices. One such indicator, fetching water from the storage

containers using vessels with handles, is very high among the households in Orissa.

John Middelton and Pat Saunders (1997) state that water has resumed importance

on the UK public health agenda. Most of the controversy has arisen with privatization

and has centered on price and ability to pay. A national plan is needed for the

conservation of water and protection of water resources and the environment. Adequate



37

central fund is needed to see that this happens. There should be greater emphasis on local

water management and a key role for local authorities. There should be fair pricing,

protection of water supplies for the poorest and most vulnerable and a ban on water

disconnection to domestic users on public health grounds. The public health lobby must

become more actively engaged in the debate about the supply, protection and price of our

most precious public health asset.

2.2.4. Hedonic price method

Brid Gleeson Hanna (2007) analyzed the effect of polluting manufacturing

facilities on the economic characteristics of nearby neighborhoods. It tests the hypothesis

that communities exposed to high levels of pollution will have lower house prices and

poorer residents than cleaner locations. The econometric model treats pollution and

income as simultaneously determined variables. The multiple-equation, fixed effects

model attempts to account for cross-section and time-varying biases. It uses Toxics

Release Inventory (TRI) and census data from the 1980s for the six New England states.

The estimates suggest that being a mile closer to a polluting manufacturing plant reduces

house values by 1.9%, which is comparably smaller than estimates from existing studies.

However, the equivalent single-equation estimate suggests, misleadingly, that pollution

has a positive effect on house values.

Joan Poor et al. (2007) pointed out that non-point source water pollution of local

watersheds can result from various sources but is related more closely to the runoff from

impervious surfaces associated with development activities such as roadways, parking

lots and large commercial structures. This research investigated the value of ambient

water quality as measured by data from twenty-two monitoring stations located

throughout a local watershed in Maryland; the St. Mary's River watershed. A hedonic

property value model is used to investigate the marginal implicit values of the following

water quality variables: total suspended solids and dissolved inorganic nitrogen.

The econometric results indicate the marginal implicit prices associated with a one

milligram per liter change in total suspended solid s and dissolved inorganic nitrogen,

were $ - 1086 and $- 17,642, respectively.



38

A study by Keith and Laura (2004) found that severely contaminating properties,

such as those on the U.S. EPA’s National Priority List (NPL), reduce the value of nearby

single-family homes. However, the vast majority of hazardous waste sites (HWS) are not

as severely contaminated as those on the NPL. Researchers also know little about HWS

effects on other land-uses such as commercial and industrial properties, which may be of

greater interest since these properties are more likely to be located near contaminated

sites. Using data for Atlanta, Georgia, HWS are found to negatively affect the market

value of nearby commercial and industrial properties. The estimates of the total value

losses caused by many of the sites are sufficiently large relative to the cost of remediation

to justify tax-increment financing as a clean-up option.

Christopher et al. (2000) used hedonic techniques to show that water quality has a

significant effect on property values along the Chesapeake Bay. They calculate the potential

benefits from an illustrative (but limited) water quality improvement, and calculate an upper

bound to the benefits from a more widespread improvement. Many environmental hedonic

studies have almost entirely ignored the potential for omitted variables bias-the

possibility that pollution sources, in addition to emitting undesirable substances, are

likely to be unpleasant to neighbors.

2.3.2. Contingent Valuation method

Yusuf Al-Ghuraiz and Adnan Enshassi (2005) has investigated the affordability

and WTP for improved water supply services. Water pricing must be integrated with

other measures to ensure that environmental, economic and social objectives are met cost

effectively. Globally, evaluation of water pricing systems continues to be a very essential

issue. Subsequently, this study reported on a research that studied the ability and

willingness of customers to pay for improved water supply service in the Gaza Strip.

This factor is important, as it strongly affects water pricing systems. Seven hundred and

sixty (760) questionnaires were distributed among the subscripted households in the

governorates of the Gaza Strip. Only 609 of them were used in data analysis. The results

of the study revealed that the willingness to pay (WTP) for improved water supply

service, that matches the WHO standard, was about 3.0 NIS/m3.This price also was

affordable by all income groups It was recommended in this study to build the water



39

tariff structure, for the improved service that matches the WHO standards, on the average

price 3.0NIS/m3 as this was affordable by all income groups. The use of cross subsidy

technique also was recommended to help the poor households that cannot afford the

average price.

Abrahams, et al. (2000) used the multinomial model of averting behavior in

response to water contamination risks for Georgia residents. According to his estimation

that perceived risk from tap water, concern about water quality (taste, odor, and

appearance of tap water), race and age are the most important determinants of bottled

water selection. Information regarding current or prior problems with tap water,

perceived risk from tap water, and income are the most important determinants of water

filter selection. Adjusting for quality differences between tap and bottled water, he

showed that averting costs estimates using bottled water expenditures would lead to an

overstatement of avoidance costs by about 12 percent.

Chowdhury (1999) used the contingent valuation method to estimate Dhaka

Slum-dwellers willingness to pay for safe drinking water. The finding of the studies

illustrate that slum dwellers are willing to pay enough for water to cover the costs of

providing it, suggesting that higher water charges would be a financially feasible to generate

funds for water system investment. Secondly the study shows that contingent valuation is an

effective tool for estimating willingness to pay for a variety of public services.

Whitehead et al. (1998) described the method of averting approach to the

valuation of potable water quality and surveyed Gaston County, North Carolina.

The study found that respondents who are concerned about risks to health from ground

water pollution are 1.67 times more likely to use a water filter. Respondents who rate

their water quality as fair or poor are 2.4 times more likely to use water filter.

Bergstrom et al. (1996) provided a conceptual model which describes the linkage

between change in groundwater quality and the services that are received by households.

Laughland et al. (1993) estimated averting expenditures for households in

Milesburg and Boggs Township, Pennsylvania experience a surface water contamination



40

episode. During the three-month boil water advisory most (91 percent) of the respondents

boiled, hauled, or purchased water. The average monthly household defensive

expenditures ranged between $16 and $35.

Collins and Steinbeck (1993) examined the actions taken by households in rural

West Virginia in response to test that revealed several contaminants in potable water

supplies. The most common types of action was to clean and /or repair the water system,

haul water, install treatment systems, boil water, use a new water source, and /or

correcting the contamination source. The average household cost of defensive behaviour

ranged from $32 and $36 per month for bacterial and mineral contaminants. The total

household cost related to organic contaminants was $109 per month.

Altaf et al. (1992) focused on willingness to pay for safe potable water while

Crocker and Tschirhart (1992) provided a theoretical framework for valuing the benefits

of preventing ground water contamination which shows the importance of the risk and

location of contamination, the exposed population, and risk perceptions.

Abdullah et al. (1992) studied the cost of water pollution in Pennsylvania using

averting expenditure increase of household to cope for the contamination and concluded

that the estimate obtained through averting expenditure analysis gives estimates that can

be used for the ground water policy decisions. Since the averting expenditure method has

also been established as a common method for the estimation of willingness to pay for

household drinking water.

Harrington et al. (1989) made an empirical study of Pennsylvania and found that

98 percent of the sample reported changes in their water consumption including

combinations of hauling water, boiling water and/or purchasing bottled water. The range

of averting expenditures range $153–$483 per month.

Smith and Desvousges (1986) found that Boston residents are more likely to

install a water filter and purchase bottled water if they perceive that potable water

contamination risks associated with hazardous waste pollution are high.

Karthikeyan and Niranjan (1992) reported that dyes are high volume chemicals,

which may enter aquatic environments in significant quantities. It has been estimated that



41

90 percent of dyes applied end up in Fabrics with the remaining 10 percent discharged to

waste streams.

2.4 Critical Remarks

The forth coming review highlights the important issues pertaining to the

industrial pollution of water particular in the Indian context and certain studies are

reviewed elsewhere. This chapter deals with identifying the appropriate theoretical

variables to be considered for the present study, besides finding lacuna in research.

Though there are several empirical studies on agricultural-related environmental

problems, such as soil degradation, wind and water erosion, only a few studies have dealt

with environmental problems in the agricultural sector due to industrial pollution.

This thesis attempts to study the environmental impact of water pollution on rural

communities in general and particularly impact on agricultural production, human health,

quality and quantity of potable water, and livestock.

Besides, the references to certain empirical studies are quoted in the subsequent

chapters of the thesis. Some important issues in this regard are linkages between Tiruppur

industrial development and changes in the micro (Noyyal river basin way side villages)

environment damage to crops and livestock due to dyeing and bleaching pollution and

impact on health and sanitation in rural communities.

It is to be admitted that the review made in this chapter cannot be claimed to be

exhaustive. But earnest efforts have been made to access the available studies in this

country, the review of which is included in the forth coming pages of this chapter.

From the preceding review, the present study could identify different theoretical

and policy aspects and variables, in the sphere of water pollution. They include, starting

from negative externalities on land and water, various chemicals affected the water

bodies, Damage to agricultural land, productivity loss, loss opportunity cost, human and

animal health problems, demand for potable and irrigation water, diseases and

willingness to pay for improved water quality. The methodology adopted in various

studies was aimed at probing issues more at once mean level. There are very few studies



42

farm in India to analyze problem in a holistic manner by integrating both economic and

environmental aspects towards finding a solution to the problem. This is not to discount the

merits of the earlier studies conducted, but aims to justify the necessity of the present study.

2.5 Theoretical Aspects of Pollution

For the aspiration of better living, nature is in use both directly and indirectly to

the human beings. That is the transformation of a raw material into final goods and in this

production process, nature is polluted by emissions and wastes. In addition, scientific

technological development now a days has made it increasingly possible to exploit

depletable resources and has led to an increasing accumulation of non-decomposable

wastes. Bu nature is no longer able to absorb all of these substances, many of which are

not only toxic for nature but for human beings as well. Efforts to reduce these emissions

and wastes have proven only temporarily successful. As a result of these the robustness

of the ecosystem declines, natural diversity reduced, ecological equilibrium breakdown.

Ultimately as a result of this process the absorption capacity of the environment

decreases and thereby environmental degradation continuously increases.

To know the problem of environmental degradation and specifically industrial

pollution, various issues were discussed by environmentalists and economists. In the

literature, existence of the predominate role of economists is not surprising because of the

increasing awareness of environmental problems associated with economic development.

This section discusses theoretical aspects like externalities, market failure and

various instruments to solve the externality problem, etc. of course, the present study

analyzed pollution problem only in the background of these theoretical aspects.

Adam smith and his followers in the classical school were concerned mostly with

resource economics and not environmental economics. The reason may be that resource

problems were more pressing than environmental problems during the 18th and 19th centuries.

Neo-classical economists, who developed the modern theory of the firm, the consumer and

market equilibrium in economics, like Alfred Marshall, Knutwicksell, L. walras an A. C.

Pigou developed the concepts of external economies and diseconomies which are crucial

in understanding environmental problems.



43

Environmental economics mainly builds its theoretical foundation on welfare

economics. Environmental problems are considered as problems of non-optimality.

Because, environment services an function treated as free goods results in ‘market

failure’ leading to non-optimality. The ideas on optimality an non-optimality are the core

of the subject matter of welfare economics. Welfare economics attempts to assess what

an optimal configuration of the economy is, what factors cause deviation from such

optimality and how to correct such deviation. Environmental pollution causes such

deviation from optimality.

Here, it is necessary to mention about Pareto Optimality which is a necessary

condition for attaining maximum social welfare. Pareto Optimum is position from which

it is impossible to make anyone better off without making someone worse-off by any

reallocation of resources or distribution of outputs. Thus, in the Pareto optimum position

the welfare of an individual of the society cannot be increased without decreasing the

welfare of another. The position of this Pareto Optimum cannot be achieved even under

perfect competition, if pollution exists there. This is mainly because, when pollution exist

in production, private marginal cost will be lower than the social marginal cost, since the

former will not take into account costs or harms imposed on others. Therefore when

pollution present, equating price with marginal cost will result in over production of the

product, which is more than socially optimum output will be produced.

So, due to the non-inclusion of external cost in the calculation of private cost,

private market system fails to allocate resources efficiently. Pollution which causes such

distortions, hence require special consideration.

In economics, pollution is a kind of negative externality or detrimental externality

an therefore such externality creates cost burden to firms, affected people, pollution

controlling authority government and to other

a) Externalities: Externalities are intrinsic and pervasive in the functioning of a modern

industrial economy and are the root cause of environmental pollution. The problem of

industrial pollution has taken into account the economic theory as an instance of negative

externality arising out of absence of property rights over air and water (environment).

Externality result when firms and households do not appropriate the full cost or benefits



44

of their productive or consumption activities. In economic theory, externality was

recognized as one of the source of market failure, which occurred when the production or

consumption decisions of one economic agent directly affect the production and

consumption possibility of others operating outside the market system. According to

Lohani and North 1984, there are two sources of market failure which are relevant to the

problem of environmental pollution. The first is the lack of a well defined an enforceable

system of private property rights in the environmental resources. Because no one owns

environmental resources. The second is the public good nature of environmental services.

Because of the free price of public good, produces of public goods are unable to collect

revenues from those who benefits.

More recently after the early part of this century the first systematic economic

analysis of pollution as an externality phenomenon was provided by Pigou. Piqou’s basic

insight can be described very simply in the modern terminology of private and social

cost. Suppose a firm’s production generates a spillover, or externality, that directly

affects other economic agents. Then the marginal social cost of production will diverse

from the marginal private cost. The solution offered for correcting the divergence

between the two costs was to make the polluting firm to pay; that is for external cost of

environmental damage inflicted upon others by the operation of the firm.

According to Meade, “an external economy (diseconomy) is an event which

confers an appreciable benefit (inflicts an appreciable damage) on some person or

persons who were not fully consenting parties in reaching the decision or decisions which

led directly or indirectly to the event in question”. Since the present study is related with

industrial pollution it is the concept of external diseconomy which is more relevant here.

This external diseconomy refers to any additional costs resulting from the

production processes. The term external implies that some costs do not accrue to firm that

produces the goods but are imposed on the society. Such costs are outside the market

system and are not reflected in relative market price. David Pearce and Turner indicated

such external cost exists when the following two conditions prevail.



45

i. An activity by one agent causes a loss of welfare to another agent.

ii. The loss of welfare is uncompensated. Here it is necessary to note the situation that

both conditions are essential for an external cost to exist. For example if the loss of

welfare is accompanied by compensation by the agent causing the externality, the

effect is said to be internalized.

The literature on these externality distinguished it as of unidirectional, reciprocal,

marginal and infra-marginal. Marginal unidirectional, marginal reciprocal, infra marginal

unidirectional and infra-marginal reciprocal externalities

It is really too ambitious and also not necessary to aim total abatement of such

negative externality or adoption of zero pollution. A moderate amount of pollution may

do little damage to society, because it can be well within its tolerance limits. Hence it is

accepted by economists, to estimate the optimum level of externality.

b) Optimal externality: David Pearce and Turner explained the concept optimal level of

externality in their recent work. They mentioned two concepts of marginal net private

benefit (MNPB) and marginal external cost (MEC) in their work. Net private benefit

means the difference between revenue and cost of undertaking polluter’s activity.

MNPB is the marginal version of this net benefit i.e., the extra net benefit from changing

the level of activity by one unit. MEC is the value of the extra damage done by pollution

arising from the activity. They mentioned that MEC is rising with the level of activity.

According to them the optimal level of externality exists where marginal net

private benefits of the firm equals to marginal external costs.

Since the markets are not able to naturally achieve the optimal level of externality

some form of government intervention seems to be necessary. But one school of thought

felt optimal level of externality can be approached without full scale government

regulatory activities. This idea was first propounded in a paper by Ronald Coase in 1960.

According to Coase, given certain assumption, the most efficient solution to pollution

damage situation is a bargaining process between polluter and sufferer. Each could

compensate the other according to who possess property rights: if the polluter has the

right the sufferer can compensate him not to pollute, if the sufferer has the right, the



46

polluter can compensate him to tolerate damage. So the market will automatically

achieve the social optimum after the bargaining process. But this Coase theorem suffered

with many practical problems and hence final if it may be decided in theory, government

regulation is the norm for pollution control context.

In the present study area, textile industry created industrial pollution caused more

of negative impact in health of people, livestock, and yield of agriculture and in

maintenance of house structure, based upon the more damage it created in the area; it

may be told that the negative externality from this industry is more than the optimum

level. It is impossible to reduce the present level of pollution load to zero level, but

efforts are necessary to reduce the pollution level to optimal level.

C) Solutions to externality: Without government intervention the polluter won’t take

these external costs into account. For controlling the pollution or negative externality the

instruments used by the government may be categorized as follows.

(i) Moral Suasion (publicity, social pressure etc).

(ii) Direct controls (regulation limiting the permissible levels of emissions).

(iii) Market instruments or market processes (taxation subsides) and

(iv) Government investment.

Widely popular and practiced instruments are direct controls and market

processes. But it is necessary to understand the ideas of other instruments also.

(i) Moral Suasion: This refers to voluntary programmes such as non mandatory investment

in pollution control equipment by firms. Voluntary trash recycling programmes, voluntary

use of unleaded and low lead gasoline, sales of auto emission control kits, car polling, and

energy saving programmes are some of the popular voluntary programmes in practice in

U.S.A. However, the success of these programmes to control pollution is to a great extent

influenced by strength of the population willing to participate in such programmes and only

when they recognize its moral responsibilities toward nature’s gifts.

In the present study area, no such programmes were followed by the firms.



47

(ii) Direct controls: Direct control takes two forms. One form of direct control is based

on the principle of absolute obligation to comply with standards fixed by law at national,

regional or local level. This means that all polluting activity must comply with regulation

directly enforceable by means of legal measure and not through the operation of

economic instruments. Another form of direct control is specification of how particular

activity must be carried on that is environmental authority requires. Polluters to adopt

certain techniques or equipment, the authority for example, may specify a type of

treatment of all emissions.

This direct control approach is the most widespread form of policy instrument for

environmental protection. This approach may prohibit certain forms of pollution

altogether or it may place limits in levels of waste emission. For textile industry, the first

form of control is used i.e., textile industries must comply with industries in the present

study area.

iii) Market instruments or market processes: According to this measure, the polluters

are charged with a price for environmental damage they made. This measure

encompasses a variety of different techniques. There are

a) an effluent charge or pollution tax

b) subsides

c) refundable deposits

d) pollution permits, and

e) Allocation of property rights.

A) Taxes or charge: Tax or charge is an instrument which offers many advantages and

seems to enjoy wide support among economists. “A tax on pollution requires the polluter

to install a meter that registers the effluents or emission released from the production

process. In accordance with the level of pollution the firm will be charged”.

“The tax or charge obliges the polluter to include his production cost, the waste

treatment and/or the cost of the damage caused by residual pollution. This reestablishes

correct pricing that the gap is bridged between private cost and social cost. Charges are

an incentive, because they prompt the polluter to choose the best solution and constantly



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improved his waste treatment process so as to reduce his costs. In particular they induce

agents who enjoy low waste treatment costs to carry out more than agents who enjoy low

waste treatment costs to carry out more than agents whose costs are high, thereby

combining in rationality efficiency, and optimum cost allocation between polluters.

Thirdly, the charges enable financial resource to be made available for restoring

damage and financing pollution control plant for joint use.

“There are some objections to the tax measure that is if pollution tax is imposed, it

leads to ‘unfair double burden’ to the industry. Industrialists argue that they have to pay

the tax and at the same time incur expenditure on installing pollution abatement

equipment, secondly consumers object to a pollution tax on grounds that the industry

would pass on the burden of charge on them in the form of higher product price. Thirdly,

some environmentalists consider it as a license to pollute. They claim that the polluters

should pay compensation to the victims and not taxes to the government”.

Though this instrument is criticized, tax or charge instrument is a best instrument

and get popularity in many countries. Because it provides incentives that will induce the

polluter to reduce the damage he imposes on the environment.

B) Subsidy: “A subsidy is financial assistance which acts an incentive for pollution to alter

their behavior. It can also be used to help firms facing problems in complying units standard.

Financial assistance can be in the form of (i) Grants (ii) soft loans and (iii) tax allowances”.

C) Refundable deposits: In certain cases, the potential offenders should be required to

leave an appropriate deposit with the environmental authorities. The funds may be used

by the environmental authorities. But must be refunded to the polluter in case he ceases

his activities that cause pollution.

D) Pollution permits: “This technique involves the issue of a prescribed number of

pollution permits each authorizing the purchaser to a specified quantity of discharges.

The authority determines the aggregate level of waste emission that is consistent with the

community’s environmental objectives and simply auction off the rights to this limited

quantity of emissions”. In this system, each permit can give its owner the ‘right’ to

pollute upto a specified amount in a given place during a particular period of time.



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E) Allocation of property rights: “Allocation of property rights is a method that

protects the environmental resources by putting them into the hands of private individual.

Since common property resources are over consumed or exploited, it is suggested to

provide exclusive property rights for such resources. In doing so, the public good

environment quality can be transformed into a private good an optimal environmental

allocation will be reached.

In India, market instruments are not used widely for textiles industry, except the

measure like tax deduction for environmental protection programmers, water cess rebate

if the firms install pollution control equipment, depreciation allowances on devices of

industrial pollution control all are normally used for all types of industries.

iv) Government investment: In certain cases the government has to take responsibility

to control pollution directly and has to invest in certain programmes such as slum

clearance, afforestation, installation of common waste treatment plants, etc. Government

machinery also has the responsibility to encourage research programmes on environment

and programmes to create environmental awareness. For this, the active participation by

the government and huge investment is essential. Government investment is also

necessary to monitor the pollution control aspect.

Cost of pollution environmental pollution problem attracts economists because

the goods from environment which were formerly free are now have an economic and

social value. Since money free are now have an economic and social value, the money

must be spent to clean up the resource (air, water etc.) and much be further spent to keep

them clean, the whole society, government, the public and industry bear the

responsibility. Hence the pollution problem attracts economist from the beginning of this

century, various costs associated with environmental pollution according to the World

Bank report are

1. Damage costs

2. Avoidance costs

3. Abatement cost

4. Transaction cost



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Peter Nijkamp (1977), Seneca and Tausig (1984) mentioned water disposal cost

which means the total costs incurred by a society in disposing of its waste. They are the

sum total of environmental damage costs and environmental management cost. Former,

environmental damage costs, consists of pollution avoidance costs and pollution damage

costs and the later, environmental management cost, consists pollution prevention costs

and pollution abatement costs.

2.6 The present study considered the following categories of costs.

Pollution damage costs: They are the sum total of costs from direct damages already

caused by pollution including ill effects on crops, human health, higher death rate,

corrosion of material etc. Vegetation damage due to pollution reduces both quality and

yield of commercial crops and lowers the aesthetic value of other plants. Damaged crops

would mean loss of income to farmers and higher food prices to consumers. The health

effects of pollution include decreased productivity, costs of health care and increased

mortality. Similarly several pollutants exert a negative effect on domestic animals health

which leads to reduced longevity, increased death rate, decreased productivity, and yield.

Damages in industrial installation and materials due to increased pollution manifested in

corrosion and increased maintenance costs. Damage costs of residential properties

include both additional maintains cost and the relative decline in the value of the

properties. For example air pollution may cause paints to peel and impose additional

painting costs on the owners of the building. Water pollution makes damage to boat hulls,

bridges and waterfront structures which impose repair cost to the owners. Such explicit

money cost increases when higher the damage occurs and damage normally increase with

the concentration of pollution and length of exposure time


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