Environmental Engineering Reference
In-Depth Information
Table 2 Tentative guide for selection of RBF instruments
Issue
Issue description
Possible RBF tool use
Behavioural problems
A stakeholder group should
change habits (hygiene),
improve practices (garbage
collection) or adopt new
technologies
Incentive/reward to sustain
users
'
new behaviour like
Conditional Cash Transfer
(CCT)
Subsidy, like Output-Based
Aid (OBA), to make new
infrastructure affordable
Access constraints
Low income population lacks
access to certain products or
services due to supply issues
(uncertain revenues from dis-
advantaged areas) or demand
ones (affordability)
Advanced Market Commit-
ment (AMC) can support
suppliers
investment when
demand is uncertain
Take or Pay (ToP) offers
guaranteed prices and quanti-
ties for a specified period
OBA subsidy can close the
affordability gap for poor
customers
'
Externalities
External costs or bene
ts are
generated by an activity/ser-
vice that affect members of
society uninvolved in the
market transaction
Payment for Environmental
Services (PES) introduce
payment for preservation/res-
toration of ecosystems
Carbon
finance (CF) allows
pricing and trading of GHG
emissions
Unsatisfied demand/
uncertain future revenues
Demand is not met because
the required investment is too
risky or the future demand
volume is too uncertain
OBD schemes can redistrib-
ute the investment responsi-
bility among different
government levels
ToP agreements can offer
guarantees to supplier so that
the optimal quantity of prod-
uct/service is reached
A dominant/monopolistic
position causes suboptimal
quantity, quality, allocation or
pricing of a good/service
OBA subsidies can help buy
down the capital cost of the
investments required
(continued)
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