Reference no: EM131612995

The Fernwood Wastewater District—at the gentle insistence of both state and federal agencies—is changing methods of financing the operating and maintenance costs of its system. Presently, all users of the system (residential, commercial, agricultural, industrial, etc.) pay for the system by a property tax; payments to the district are assigned according to individual holdings of property value. If a car wash constitutes 0.0001 of total property in the district, the car wash pays 0.0001 of the operating and maintenance costs of the system. The proposed effluent-charge system would assign cost on the basis of estimated toxic-waste quality and quantity introduced into the system. The structure could easily be applied because a federal agency has data on the amount and type of waste that production and consumption processes generate annually, based on national data. These data would then be used to assign an annual effluent charge to each user, based on the total costs of the district. How do the two systems differ in terms of incentive to reduce wastewater quantity and toxicity?