Political drivers of and barriers to Public-Private Partnerships: The role of political involvement

The application and design of public-private partnerships between the extremes of purely public or purely private task fulfilment in public services is, in practice, subject to political processes. Decisions about PPPs (realisation, arrangement) are taken in the political arena and are therefore not theoretical optimisation exercises. The interests and resources of the actors who participate in the political decision-making process as well as the rules of the political process have a powerful influence on whether, in what areas, and in what form PPPs are realised. The distance between this output and solutions that are theoretically desirable given certain ideal goals (e.g. efficiency) and conditions can be referred to as political bias. So what role does the political process play in the realisation of PPPs, in the actual design of PPPs, and in their performance? Using public choice and institutional economics theory this paper analyses what chances of success PPPs have given the existing decision-making structures and the inherent incentives for participating actors, and in what way political influence is brought to bear in the first place. Furthermore, aspects of political science in this field (legitimacy, democratic control) are considered as well. Using PPPs there might be a trade-off between reduced democratic control, but also reinforced market control. It turns out that political involvement might be both an important driver as well as an obstacle for (efficient) PPPs and that it is likely to decrease efficiency either way. A case study for userfinancing PPPs in the transport sector highlights the problems of political renitency. --public-private partnership,politics,bureaucracy,public choice,contract theory,agency,tax state,transaction cost,governance,legitimacy,transport infrastructure,user financing

What is wrong with virtual water trading?

So-called virtual water, the water embedded in internationally traded goods, has come under discussion. The amount of quantitative studies which attempt to estimate volumes and flows of virtual water in relation to agricultural trade is rising rapidly, while the concept has been recognized by large firms and international institutions. From the viewpoint of economic trade theory, the endowment with abundant water resources gives countries a comparative advantage in the export of waterintensive goods, while water scarce countries gain the option to alleviate stress on domestic water resources by substituting the production of water-intensive goods by imports. However, fairness implications are seen to arise in the reallocation of water resources through the means of mostly agricultural trade. In this perspective, moral problems can be attached to both imports and exports, and even to a country's own consumption of virtual water. Global institutional arrangements are therefore suggested, to regulate virtual water flows in a "fair" and "efficient" manner. This paper will give a short overview of the concept's history and findings, and subsequently analyse it from the perspective of economic trade and resource theory. The contribution of this paper will be to examine the concept of virtual water in terms of the problems it evokes, its informative value and the policy suggestions which are made in this context. It must be concluded that the concept is unspecific and inconsistent, implying governance schemes which will neither improve efficiency nor sustainability in today's trade patterns. --virtual water,water footprint,international trade,global water governance

Why should support schemes for renewable electricity complement the EU emissions trading scheme?

In virtually all EU Member States, the EU Emissions Trading Scheme (EU ETS) is complemented by support schemes for electricity generation from renewable energy sources (RES-E). This policy mix has been subject to strong criticism. It is mainly argued that RES-E schemes contribute nothing to emissions reduction and undermine the cost-effectiveness of the EU ETS. Consequently, many scholars suggest the abolition of RES-E schemes. However, this conclusion rests on quite narrow and unrealistic assumptions about the design and performance of markets and policies. This article provides a systematic and comprehensive review and discussion of possible rationales for combining the EU ETS with RES-E support schemes. The first and most important reason may be restrictions to technology development and adoption. These may be attributed to the failure of markets as well as policies, and more generally to the path dependency in socio-technical systems. Under these conditions, RES-E schemes are required to reach sufficient levels of technology development. In addition, it is highlighted that in contrast to the EU ETS RES-E support schemes may provide benefits beyond mitigating climate change. --EU Emissions Trading System,market failure,path dependency,policy failure,policy mix,renewable energies,subsidies

Investigating affordability problems of utility services - a theoretical study on the ratio measure

Unlike in developing countries, there tends to be no problem of access to water, electricity, and heating for private households in transition countries. However, transition countries have a considerable amount of low-income households, and the problem of affordability of these environmental-related utility services remains urgent. Welfare economics literature suggests to neglect affordability aspects by separating allocative from distributive impacts of pricing. In practice, this separation runs the risk of rendering impossible any sustainability-oriented price reform. An Institutional Economics approach takes competing objectives into account. From this viewpoint it appears to be worth investigating the affordability-concept. Although the affordability-related research has escalated remarkably in recent years, the theoretical contributions are still limited. Hence, we focus on the simple ratio measure often used in practice. We analyze the arguments speaking for the 'potential affordability approach'. But we find that - within that approach - adhering formally to the ratio measure is possible only under conditions that make no sense regarding the concern of the measure. Thus for most cases the ratio measure is misleading. Some considerations on practical use for governance conclude the paper. --Affordability,Transition Countries,Utility Services

Article 9 Water Framework Directive: do we really need to calculate environmental and resource costs?

Article 9 of the EU Water Framework Directive (WFD) requires Member States to take account of the principle of recovery of the costs of water services, including environmental and resource costs (ERCs). Whilst legally the Member States have broad scope for discretion when applying Article 9, the idea that the EU legislator has effectively assigned the Member States a mathematical task to determine the level of cost recovery achieved for environmental and resource costs as well is increasingly gaining ground in the Common Implementation Strategy (CIS) process. The present paper shows that this strict interpretation of taking account of environmental and resource costs has no basis in Article 9, is conceptually misleading, and could even prove counter-productive for the practical application of water protection

Environmental policy through climate engineering?

For years, humans have been trying to stabilize the world’s environment by lowering the amount of greenhouse gases that their societies pump into the air. In 1992, this approach was even incorporated into the UN Framework Convention on Climate Change. But because this strategy failed to produce the desired results so far, technology-based processes designed to save the environment have emerged as a popular new weapon in the climate-protection arsenal. The question is: Are such climate-engineering efforts a viable environmental policy option? And can they serve, at the very least, as the ultima ratio if all other efforts to stave off climate change fail

Article 9 Water Framework Directive - what does the term "water services" mean? On the EU Court of Justice conclusions of Advocate General Jääskinen in case C-525/12

The conclusions of Advocate General Jääskinen in the matter of the infringement proceedings against Germany, regarding the scope of the term “water services” in Article 9 of the Water Framework Directive, are now available. In these he considers that the action brought by the Commission against the narrow interpretation in Germany, which is restricted to water supply and waste water disposal, is inadmissible due to the fact that there is no complaint in respect of any clearly defined conduct that would constitute an infringement; in the alternative he materially agrees in full with the position put forward by Germany. However, this paper argues that the AG’s main arguments in favour of a strict interpretation are misleading

Konsumenten in der Produktverantwortung

Die EU einigte sich Ende Mai nach langer Diskussion auf eine Altauto-Richtlinie, die in einer Übergangszeit kostenlose Rücknahmesysteme beinhaltet. Weiterhin ist aber umstritten, ob eine Rücknahme ausgedienter Kfz für die Verbraucher kostenlos sein sollte. Welche Rolle hat der Konsument im Rahmen der Produktverantwortung? Was ist hierzu dem deutschen Kreislaufwirtschafts- und Abfallgesetz zu entnehmen? --

Private Finanzierung von Fernstraßen: Erfahrungen und Probleme

Seit 1994 hat der Gesetzgeber die Möglichkeit geschaffen, Fernstraßen privat zu errichten und gegen eine Mautgebühr zu betreiben. Die bisherigen Erfahrungen sind ernüchternd. Warum ist Betreibermodellen bislang der Durchbruch nicht gelungen? Welche Hemmnisse lassen sich für ein privatwirtschaftliches Engagement identifizieren? Wie tragfähig sind Mautgebühren für die private Finanzierung von Verkehrsinfrastruktur? --

Germany’s decision to phase out nuclear power is fundamentally sensible from an economic perspective

Germany has made a formal commitment to phase out the use of nuclear power by 2022. Erik Gawel and Sebastian Strunz write on the implications of the strategy for Germany’s future energy mix and whether the approach adopted in the country could function as a model for other European states. They argue that while the target is undeniably challenging, long-term it is economically sensible and feasible to phase out both fossil fuels and nuclear energy in favour of renewables