An Empirical Investigation of Collective Action Possibilities for Industrial Water Pollution Abatement: Case Study of a Cluster of Small-Scale Industries in India

A case study of the Nandesari Industrial Estate in Gujarat, India, demonstrates the roles played by different agents in industrial water pollution abatement: affected parties, polluters, nongovernmental organizations, regulators, and the court. The study empirically estimates the “benefits” and “costs” of water pollution abatement for a cluster of 250 small-scale industries at Nandesari, and uses these estimates for a social cost-benefit analysis. Benefits are estimated using the contingent valuation method, with a “willingness to accept” format for the rural village areas, and a “willingness to pay” format for the urban area of the city of Vadodara. The study considers costs of command and control, market-based solutions, and the option of common effluent treatment as alternatives. It discusses how joint abatement 89 Smita Misra ([email protected]) is a Senior Environmental Economist in the South Asia vice presidency of the World Bank. This paper summarizes work from the author’s other published papers and doctoral thesis, submitted to Delhi School of Economics, University of Delhi, India. All references are given. The findings, interpretation, and conclusions are the author’s own and should not be attributed to the World Bank, its Executive Board of Directors, or any of its member countries. World Bank Economists’ Forum Vol. 2 (2002), pp. 89–113.