Allocating Costs of Environmental Management among Generations: A Case of Environmental Liabilities in Transition Econom
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Allocating Costs of Environmental Management among Generations: A Case of Environmental Liabilities in Transition Economies Satoru Komatsu • Andrey Kalugin • Shinji Kaneko
Published online: 11 October 2012 Springer-Verlag Wien 2012
Abstract The objective of this paper is to examine cost allocation in relation to remediating environmental liability issues in Russia, where significant environmental damages, continuing from the Soviet era, present serious impediments to pursuing sustainable development. The research attempts to highlight citizens’ preferences for remediating facilities and sites with environmental liabilities, and elicits preference differences among citizens using choice experiment methods. Intergenerational issues are involved in addressing environmental liabilities in transition economies because the causes and effects are spread among generations. Therefore, evaluating citizens’ preferences provides more policy implications for future remediation initiatives. The econometric analysis reveals that citizens demonstrate positive preferences for reducing pollution of drinking water and soil decontamination. The research also suggests that the households with higher incomes, older household heads (or spouses), and more young children have higher preferences for remediating environmental liabilities in Russia. Estimation of the marginal willingness to pay (MWTP) for age and income segments of the households allows the government to determine a suitable taxation policy. The findings provide new insights on cost allocation in relation to remediating environmental damages in transition economies that have suffered from these serious environmental legacies.
S. Komatsu (&) S. Kaneko Graduate School for International Development and Cooperation, Hiroshima University, Hiroshima, Japan e-mail: [email protected] S. Kaneko e-mail: [email protected] A. Kalugin Hiroshima YMCA school of languages, Hiroshima, Japan e-mail: [email protected]
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Keywords Environmental management Willingness to pay Preference Generation Transition economics JEL Classification
O13 P28 Q56
Introduction Accounting for intergenerational issues when remediating environmental issues is of primary importance for analyzing potential beneficiaries. This will be particularly indispensable in considering environmental problems in transition economies, where massive environmental pollutions occurred during the former communist era and have become a serious burden and impediment to sustainable economic development for the present generation. Environmental issues dating from the previous regimes have remained abundant and have resulted in serious risks to the regional and national economies, in terms of polluted lands, poor water quality due to the discharge of toxic wastes, and degradation of ecosystems. The environmental pressures in the transition economies involve environmental liabilities of the previously state-owned companies. The Soviet system placed great emphasis
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