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Negotiating between Authority and Polluters: An Approach to Managing Water Quality

Water Law and Economics

  1. Petr Šauer,
  2. Antonín Dvořák

Published Online: 15 JUL 2005

DOI: 10.1002/047147844X.wl1503

Water Encyclopedia

Water Encyclopedia

How to Cite

Šauer, P. and Dvořák, A. 2005. Negotiating between Authority and Polluters: An Approach to Managing Water Quality. Water Encyclopedia. 4:647–648.

Author Information

  1. University of Economics, Prague, Czech Republic

Publication History

  1. Published Online: 15 JUL 2005


Water pollution reduction is one of the most complicated challenges of environmental policy. Technical solutions exist that are already economically efficient for the polluters. However, many projects exist that bring net control costs for the polluters, so the polluters do not have an economic interest in them. These projects can still be efficient from the social point of view and polluters should be motivated in their realization. Our contribution is to present a relatively new approach that could lead to cost-effective solutions of water pollution reduction problems. It is based on voluntary (multiple-round) negotiations between an authority and polluters, where economic tools of environmental policy (environmental fees and subsidies) are used. The principle of the approach is explained in the chapter. An illustration on a simple economic laboratory experiment follows. Various potential practical applications of the approach are mentioned. The help with an efficient initial distribution of tradable water pollution rights is probably the most interesting application. It also could contribute to resolving complicated situations (characterized by many pollutants, synergic effects, etc.) before the rights are allocated for a limited number of the pollutants.


  • environmental policy;
  • negotiation;
  • voluntary agreements;
  • laboratory economic experiments;
  • water pollution reduction