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2001

Sammendrag

Over the last years many new methods have become available for treating wastewater. The purpose of this paper is to demonstrate the potential for cost reductions by a transition from a household strategy (HS) to a recipient strategy (RS). We will further discuss reasons for why municipalities still base their policies on the former strategy. Results from a case study show that an RS is clearly better than an HS from a standard allocative efficiency point of view. In addition, it is more flexible. However, such an assessment underestimates important factors. First, transaction costs following a transition from HS to RS may reduce profits substantially. Secondly, in most cases there will be both gainers and losers following a transition. Who they are, will, however, depend on the chosen rules for distribution costs under the RS. Thus, this ex ante uncertainty constitutes an impedement for change since action must be expected first of all from the potential gainers. Finally, since changes in the rights structure are involved, the economic gain obtained may not be great enough to compensate the losers, if this is a necessary prerequisite. The perceived loss may be much higher than the monetary loss as calculated in the standard analysis. This argument is based on the observed deviations between WTP and WTA in the literature. Most probably the existing municipal organizations have to initiate the process if a change is to come about. However lack of knowledge and professonal traditions concerning the planning of wastewater systems may delay or obstruct such a change.