Measuring the costs of industrial water pollution control: A study of sugar industry

Abstract

Given the fact that sugar producing industries are one of the most water consuming food industries of our country, the absence of complete purification of the industry’s sewage and sewage disposal with high BOD index impose lots of environmentel costs to the society. Hence, economic assessment of these industries, without taking environmentel costs, can be very misleading. To include such costs, this paper uses a Stochastic Nonparametric Envelopment of Data (StoNED) to evaluate the marginal cost of controlling the BOD index of wastewater produced by the sugar industry in the year 2017. The results show sugar industry in our country is environmentally inefficient on average about 6.5 percent. In addition, the average shadow price per kilogram caused by BOD of manufacturing plants is about 612.6 thousand Rials. Obtained shadow prices can be used to plan proper pollution controlling tools; they also are used for more accurate evaluation of economic planning of sewage treatment.

Keywords

• shadow price
• bod
• sugar industry
• mcpc