The Role of the Ecological Fiscal Transfers for Water …
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urban centers of neighboring municipalities. In Piauí, the EFTs scheme is based on
stamps, which vary from “A” to “B”, “A” meaning the best standard of environmental protection at the local level, and “B” the minimum standard of environmental
protection of municipalities to receive money from EFTs. Such schema dedicate five
percent, among other criteria, for water conservation policies at the local level. It
comprises protection of water sources, such as the protection of areas where water
sources are recharged, replantation or conservation of riparian forest and headwaters,
adequate disposal of sanitary sewage, and monitoring the quality of the public water
distributed and served. In Rio de Janeiro, the EFTs scheme comprises 30% of the total
dedicated to EFTs and has two main criteria: the watershed drainage area and water
supply springs. In Tocantins, the EFTs scheme for water policies comprises only
3.5% (among other criteria: basic sanitation, and solid waste management) includes
the quality of the public water distributed and served. In Pernambuco, EFTs for water
conservation is not regulated by the state government so far. However, the inclusion
of conservation of water source and rivers is predicted for near future.
The role of ecological fiscal transfers for water conservation policies in these
schemes is to secure the availability and sustainable management of water and sanitation at the local level by providing financial incentive and compensation to local
governments. Incentive because some municipalities in developing countries face
financial stress and lack of technology to provide such type of public good. Mayors face dilemmas when making policy choices for their electorate. Compensation
because municipal governments will be more willing in contribute to providing a collective good (water conservation) in which its benefits extend beyond their borders.
They are compensated for the benefits that other municipalities may enjoy, such as
the case of EFT in Paraná that compensate local governments that preserve basins
of superficial springs which, in turn, serve the urban centers of neighboring cities.
This role of EFTs is strongly supports goal 6 of the 2030 Agenda for Sustainable
Development.
4 Conclusion
EFTs in Brazil redistribute the ICMS from the state government to local governments
using ecological indicators. This mechanism can be quite different from other tax
systems, such as in more centrally governments. It can change the incentive and
compensation dimensions of EFTs to be implemented. However, both cases may
apply such policy tool to achieve targets in water policies.
As a policy recommendation, we suggest participation of the political actors
involved in the policy process. EFTs are a redistributive policy tools which affect
the budget of local governments. This effect may be strong for developing countries;
therefore, this strategy can minimize conflicts and resistances.
For future research, we recommend testing the effects of EFTs for water conservation policies empirically, mainly to test whether with the introduction of EFTs the
water policies increased at the local level (concerning quality and quantity).
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urban centers of neighboring municipalities. In Piauí, the EFTs scheme is based on
stamps, which vary from “A” to “B”, “A” meaning the best standard of environmental protection at the local level, and “B” the minimum standard of environmental
protection of municipalities to receive money from EFTs. Such schema dedicate five
percent, among other criteria, for water conservation policies at the local level. It
comprises protection of water sources, such as the protection of areas where water
sources are recharged, replantation or conservation of riparian forest and headwaters,
adequate disposal of sanitary sewage, and monitoring the quality of the public water
distributed and served. In Rio de Janeiro, the EFTs scheme comprises 30% of the total
dedicated to EFTs and has two main criteria: the watershed drainage area and water
supply springs. In Tocantins, the EFTs scheme for water policies comprises only
3.5% (among other criteria: basic sanitation, and solid waste management) includes
the quality of the public water distributed and served. In Pernambuco, EFTs for water
conservation is not regulated by the state government so far. However, the inclusion
of conservation of water source and rivers is predicted for near future.
The role of ecological fiscal transfers for water conservation policies in these
schemes is to secure the availability and sustainable management of water and sanitation at the local level by providing financial incentive and compensation to local
governments. Incentive because some municipalities in developing countries face
financial stress and lack of technology to provide such type of public good. Mayors face dilemmas when making policy choices for their electorate. Compensation
because municipal governments will be more willing in contribute to providing a collective good (water conservation) in which its benefits extend beyond their borders.
They are compensated for the benefits that other municipalities may enjoy, such as
the case of EFT in Paraná that compensate local governments that preserve basins
of superficial springs which, in turn, serve the urban centers of neighboring cities.
This role of EFTs is strongly supports goal 6 of the 2030 Agenda for Sustainable
Development.
4 Conclusion
EFTs in Brazil redistribute the ICMS from the state government to local governments
using ecological indicators. This mechanism can be quite different from other tax
systems, such as in more centrally governments. It can change the incentive and
compensation dimensions of EFTs to be implemented. However, both cases may
apply such policy tool to achieve targets in water policies.
As a policy recommendation, we suggest participation of the political actors
involved in the policy process. EFTs are a redistributive policy tools which affect
the budget of local governments. This effect may be strong for developing countries;
therefore, this strategy can minimize conflicts and resistances.
For future research, we recommend testing the effects of EFTs for water conservation policies empirically, mainly to test whether with the introduction of EFTs the
water policies increased at the local level (concerning quality and quantity).