André Felipe Danelon, Humberto Francisco Silva Spolador (p), Subal Kumbhakar

Weronika Sojka

Brazil has set ambitious goals since 2013 to provide sanitation services to the entire population by 2033; however, as of 2022, 16% of households lack piped water, and 45% lack adequate waste treatment. Concurrently, the country is committed to protecting terrestrial ecosystems. In 2020, the introduction of the New Regulatory Framework established an effective National Water Agency. The agency's responsibilities include regulating tariffs to promote the expansion of sanitation services and implementing sustainable forest management measures to safeguard water springs, rivers, and other hydrological resources. This study investigates the intersection of water quality, sanitation costs, and forest conservation. It employs a modern TFP decomposition for an economic performance assessment at the firm level, considering unobserved heterogeneity and technological variations among companies. The findings reveal a concerning trend in the sanitation sector, indicating a negative technical progress and TFP stagnation over the lats 25 years. On the other hand, the sanitation sector demonstrates robust economies of scale and density, potentially driving TFP growth as the sanitation coverage expands. Results also capture the cost-reducing effects of environmental conservancy in water treatment, highlighting both high transient efficiency and low persistent efficiency, suggesting that sanitation companies may be employing, under the current institutional envinronment, inadequate technologies to address contemporary challenges.

Lorena Fonseca, Raul Silveira Neto (p)

Humberto Francisco Silva Spolador

Developing countries’ cities are known for their poor urban infrastructure and lack of basic services such as garbage collection, potable water, and sewage, for example. In Brazil, the 1988 constitution clearly defines the municipalities as the political entity responsible for the provision of urban services, a considerable challenge due to the country’s very quick urbanization process, on the one hand, and lack of funding and own fiscal receipts, on the other. A situation that recently became even harder due to the expansion of social policies and associated federal demands for cities’ complementary actions. We study the causal effect of the Fundo de Participação dos Municípios (FPM), the most important Brazilian federal unconditional transfer to municipalities, on urban infrastructure services in small municipalities of the country. Our identification strategy is based on FPM’s rules that are based on the population thresholds of the municipalities and allow applying Regression Discontinuity Fuzzy Design (RDD) to estimate local effects of the FPM on urban services outcomes (access to water, sewage, garbage collection, urban collective transport, and street paving). Our results indicate that the FPM increases the expenditures on urbanism and transport, besides its effects on education and health expenditures. The FPM municipal resources also positively impact water provision through a general network, but no effects are found on sewage services, garbage collection, urban collective transport, and street paving. Furthermore, we found that the positive effect of FPM on urban expenditures and services occurs solely in the municipalities in the South and Southeast regions of Brazil, the richest ones. In all five regions, we also found that FPM resources bring more expenditures on public administration. Overall, despite its relevance for the small municipalities’ receipts, we constate that the FPM resources play a small role in improving urban services. We note that these results are consistent with the highest share of own resources in the municipalities’ receipts in the richest regions of the country.

Weronika Sojka (p)

Raul Silveira Neto

In the contemporary urban landscape, cities are increasingly turning to Agent Based Modelling to simulate and analyze complex problems, such as the optimization of waste collection practices. ABM provides a comprehensive approach to model the interactions between various factors influencing plastic recycling, allowing decision-makers to test and evaluate different scenarios. By leveraging ABM, cities can gain valuable insights into the effects of technological advancements, social engagement, and policy changes on the overall efficiency of waste management systems. This approach facilitates evidence-based decision-making, enabling cities to tailor their policies to the dynamic needs of the Circular Economy while promoting sustainable practices in plastic recycling.
This study aims to take a look into different types of urban management challenges that can be solved with the use of ABM and dive into real life examples. Nonetheless it will certainly stress solutions concerning plastic waste collection policies and their assessment. Effective policies are essential for generating high-quality recycled plastic granulate, a critical component in subsequent recycling processes. However, the transition to these policies necessitates significant resources and timely implementation based on quantitative evidence. A critical knowledge gap exists, encompassing technological, social, environmental, and financial aspects affecting plastic recycling and their intricate interplay. This knowledge deficiency hinders decision-makers from making evidence-based choices, impeding efforts to optimize current city management systems and align policies with the principles of the Circular Economy.