Financial sustainability of environmental investment under an empirical pollution abatement policy instrument in India: the case of wastewater treatment

The objective of this study is to investigate the financial viability of private sector investment in effluent treatment plants (ETPs) in India by employing an assumed abatement policy instrument. The policy instrument proposed in this study is framed on a deposit-refund system. The focus of the study is to gauge the economic benefit of the investment in ETPs under the proposed policy instrument and also to compare the economic benefit with the abatement cost using standard cost-benefit analysis, including conversion of money flows to net-present-value at a real discount rate. Results show that a firm will be financially benefited under the proposed policy instrument if it invests in implementing and operating the pollution abatement equipment.