ABSTRACT
This chapter discusses three environmental services: Water supply, Waste water treatment and disposal and Solid waste collection and disposal. Central government, with support mainly from EU Cohesion Funds, provides almost the whole of the capital cost of water and waste water services, but, in the case of solid waste services, local authorities themselves fund capital investment from their various sources of income. A major proportion of solid waste in France is it from household, commercial or industrial sources, goes to illegal landfill sites. Subsidise recycling to the degree of its external benefit, or preferably introduce an energy tax Charging the full long run marginal costs (LRMC) for disposal to landfill would give an automatic boost to the alternative disposal routes, that is, recycling, re-use and reduction at source. Ideally charges should be set to reflect LRMC, in order to give the correct resource signals.
