Environmental Management Expenditure and Fiscal Sustainability of South African Urban Municipalities: A Panel Data Model

Authors

  • Silas Mukwarami Sustainable Livelihoods, University of South Africa, South Africa
  • Huibrecht M van der Poll Sustainable Livelihoods, University of South Africa, South Africa

DOI:

https://doi.org/10.47540/ijsei.v4i2.942

Keywords:

Environmental Expenditure, Environmental Management Practices, Environmental Protection, Fiscal Sustainability, Local Municipalities

Abstract

Globally, instituting good environmental management practices within cities in developing countries is a climate-induced risk mitigation strategy. It is, however, an opportunity for local municipalities to achieve fiscal sustainability objectives and environmentally responsible decisions. Cash-constrained local municipalities are characterized by failures to balance environmental and financial needs, resulting in complex urban sustainability challenges. Therefore, this article examines the relationship between environmental management expenditure and fiscal sustainability (FS) in South African local municipalities to contribute to the debate concerning the sustainability of environmental protection projects in local municipalities. The study employed ordinary least squares and feasible generalized least squares to estimate coefficients of linear regression equations involving data collected from 30 local municipalities from 2012 to 2021. The results suggest that only wastewater and environmental protection expenditures positively impact FS, with solid waste management expenditure influencing the FS negatively. Lessons from the research will assist policymakers and municipal administrators in addressing environmental policy incoherence for the improved financial viability of environmental protection projects. Lastly, future research can focus on environmental data collection and reporting for improved and informed environmental protection decisions.

Downloads

Download data is not yet available.

References

Abdulredha, M., Kot, P., Al Khaddar, R., Jordan, D., & Abdulridha, A. (2020). Investigating municipal solid waste management system performance during the Arba'een event in the city of Kerbala, Iraq. Environment, Development and Sustainability, 22(2), 1431-1454.

Abila, B. and Kantola, J. (2019). The Perceived Role of Financial Incentives in Promoting Waste Recycling—Empirical Evidence from Finland. Recycling, 4, (1), 4.

Adeboye, N. O., Agunbiade, D. A., & Author, C. (2017). Testing for Periodicity Effects in a Panel Data Regression Model. Caribbean Journal of Science and Technology, 5, 40–050. http://caribjscitech.com/

Aiyetan, A. O., & Das, D. K. (2021). Evaluation of the factors and strategies for water infrastructure project delivery in South Africa. Infrastructures, 6(5).

Alao, M. A., Popoola, O. M., & Ayodele, T. R. (2022). Waste‐to‐energy nexus: An overview of technologies and implementation for sustainable development. Cleaner Energy Systems, 3, 100034. https://doi.org/10.1016/j.cles.2022.100034

Ayodele, T. R., Ogunjuyigbe, A. S. O., & Alao, M. A. (2018). Economic and environmental assessment of electricity generation using biogas from organic fraction of municipal solid waste for the city of Ibadan, Nigeria. Journal of Cleaner Production, 203, 718–735.

Barak, N. (2020). Ecological city-zenship. Environmental Politics, 29(3), 479–499. https://doi.org/10.1080/09644016.2019.1660504

Bartolacci, F., Paolini, A., Quaranta, A. G., & Soverchia, M. (2018). The relationship between good environmental practices and financial performance: Evidence from Italian waste management companies. Sustainable Production and Consumption, 14, 129–135. https://doi.org/10.1016/j.spc.2018.02.002

Bispo, R., Henriques-Rodrigues, L., Alpizar-Jara, R., & de Carvalho, M. (Eds.). (2022). Recent Developments in Statistics and Data Science (Vol. 398). Springer International Publishing. https://doi.org/10.1007/978-3-031-12766-3

Boldkhuyag, E. (2015). Driving forces in small-firm investment in local environmental management systems A Case study in the Gothenburg food service industry [Thesis, Swedish University of Agricultural Sciences]. http://stud.epsilon.slu.se

Broietti, C., Flach, L., Rover, S., & Salvador de Souza, J. A. (2018). Public expenditure and the environmental management of Brazilian municipalities: A panel data model. International Journal of Sustainable Development and World Ecology, 25(7), 630–641.

Fakoya, M. B., & Imuezerua, E. O. (2020). Improving water pricing decisions through material flow cost accounting model: a case study of the Politsi Water Treatment Scheme in South Africa. Environment, Development and Sustainability, 0123456789.

Fakoya, M. B., & Imuezerua, E. O. (2021). Improving water pricing decisions through material flow cost accounting model: a case study of the Politsi Water Treatment Scheme in South Africa. Environment, Development and Sustainability, 23(2), 2243–2260. https://doi.org/10.1007/s10668-020-00672-7

Fernández-Aracil, P., Ortuño-Padilla, A., & Melgarejo-Moreno, J. (2018). Factors related to municipal costs of waste collection service in Spain. Journal of Cleaner Production, 175, 553–560.

García-López, M., Melgarejo, J., & Montano, B. (2021). The financing of wastewater treatment and the balance of payments for water services: Evidence from municipalities in the region of Valencia. Sustainability, 13(11).

Gunarathne, A. D. N., & Lee, K. H. (2020). Eco-control for corporate sustainable management: A sustainability development stage perspective. Corporate Social Responsibility and Environmental Management, 27(6), 2515–2529.

He, L., Yin, F., Zhong, Z., & Ding, Z. (2017). The impact of local government investment on the carbon emissions reduction effect: An empirical analysis of panel data from 30 provinces and municipalities in China. PLoS ONE, 12(7).

Herrera-Navarrete, R., Colín-Cruz, A., Arellano-Wences, H. J., Sampedro-Rosas, M. L., Rosas-Acevedo, J. L., & Rodríguez-Herrera, A. L. (2022). Municipal Wastewater Treatment Plants: Gap, Challenges, and Opportunities in Environmental Management. Environmental Management, 69(1), 75–88.

Horta, I. M., Camanho, A. S., Dias, T. G., & Niza, S. (2016). The assessment of municipal services: Environmental efficiency of buildings construction. Lecture Notes in Business Information Processing, 247, 237–250.

Jørgensen FA and D Jørgensen. 2021. Citizen science for environmental citizenship. Conservation Biology 35(4): 1344-1347.

Hung, L. Y., Wang, S. M., & Yeh, T. K. (2022). Collaboration between the government and environmental non-governmental organisations for marine debris policy development: The Taiwan experience. Marine Policy, 135, 104849.

Kim, D., & Song, S. K. (2019). The multifunctional benefits of green infrastructure in community development: An analytical review based on 447 cases. Sustainability, 11 (14).

King, A., & Shackleton, C. M. (2020). Maintenance of public and private urban green infrastructure provides significant employment in Eastern Cape towns, South Africa. Urban Forestry and Urban Greening, 54.

Knief, U. (2021). Violating the normality assumption may be the lesser of two evils. 2576–2590.

Kubanza, N. S., & Simatele, M. D. (2020). Sustainable solid waste management in developing countries: A study of institutional strengthening for solid waste management in Johannesburg, South Africa. Journal of Environmental Planning and Management, 63(2), 175–188.

Lakhan, C. (2016) 'The relationship between municipal waste diversion incentivization and recycling system performance', Resources, Conservation and Recycling, 106, 68–77.

Lopez, L., & Weber, S. (2017). Testing for Granger causality in panel data. In The Stata Journal (Vol. 17, Issue 4).

Maleka, T. G., Nyirenda, G., & Fakoya, M. B. (2017). The relationship between waste management expenditure and waste reduction targets on selected JSE companies. Sustainability, 9(9).

Manamela, T.A., 2022. Effect of municipal waste management budget on waste management service delivery (Doctoral dissertation). [Thesis University of Limpopo] http://hdl.handle.net/10386/3923

Matsler, A. M., Meerow, S., Mell, I. C., & Pavao-Zuckerman, M. A. (2021). A 'green' chameleon: Exploring the many disciplinary definitions, goals, and forms of "green infrastructure." In Landscape and Urban Planning (Vol. 214). Elsevier B.V. https://doi.org/10.1016/j.landurbplan.2021.104145

McCright, A. M., & Dunlap, R. E. (2010). Anti-reflexivity: The American conservative movement's success in undermining climate science and policy. Theory, Culture and Society, 27(2), 100–133.

Miller, S., & Startz, R. (2019). Feasible generalized least squares using support vector regression. Economics Letters, 175, 28–31.

Mnguni, S., & Subban, M. (2022). Audit Outcome Challenges in Local Government The Case of Three Metropolitan Municipalities in South Africa. African Journal of Public Affairs, 13(1).

Mukwarami, S. (2021). Sustainable cities water investment and management for improved water service delivery: Case study of South African Metropolitan Municipalities [Thesis, University of Limpopo]. http://ulspace.ul.ac.za/bitstream/handle/10386/3831/mukwarami_s_2021.pdf?sequence=1&isAllowed=y

Mukwarami, S., & Fakoya, M. B. (2022). Causality relationship between sustainability factors and water management: The emerging market study. Journal of Governance and Regulation, 11(2), 144–158.

Naidoo, N., Pearce, D., Visser, W., Crafford, J., & Maila, D. (2016). Implementation of Effective Wastewater Charges by Municipalities in South Africa: An Investigation Into the Barriers and Enablers: Report to the Water Research.

Naz, S., Sultan, R., Zaman, K., Aldakhil, A. M., Nassani, A. A., & Abro, M. M. Q. (2019). Moderating and mediating role of renewable energy consumption, FDI inflows, and economic growth on carbon dioxide emissions: evidence from robust least square estimator. Environmental Science and Pollution Research, 26(3), 2806-2819. https://doi.org/10.1007/s11356-018-3837-6

Nguyen, T. K. L., Ngo, H. H., Guo, W., Nguyen, T. L. H., Chang, S. W., Nguyen, D. D., Varjani, S., Lei, Z., & Deng, L. (2021a). Environmental impacts and greenhouse gas emissions assessment for energy recovery and material recycle of the wastewater treatment plant. Science of the Total Environment, 784. https://doi.org/10.1016/j.scitotenv.2021.147135

Pajares, E. M., Valero, L. G., & Sánchez, I. M. R. (2019). Cost of Urban Wastewater Treatment and Ecotaxes: Evidence from Municipalities in Southern Europe. Water 2019, Vol. 11, Page 423, 11(3), 423.

Park, B.J. and Lee, K.H. (2021) 'The sensitivity of corporate social performance to corporate financial performance: A "time-based" agency theory perspective', Australian Journal of Management, 46, 224–247.

Razzaq, A., Sharif, A., Najmi, A., Tseng, M. L., & Lim, M. K. (2021). Dynamic and causality interrelationships from municipal solid waste recycling to economic growth, carbon emissions and energy efficiency using a novel bootstrapping autoregressive distributed lag. Resources, Conservation and Recycling, 166.

Ríos, A. M., & Picazo-Tadeo, A. J. (2021). Measuring environmental performance in the treatment of municipal solid waste: The case of the European Union-28. Ecological Indicators, 123, 107328.

Ryan, C., Robinson, M., & Grigg, T. (2000). Financial performance indicators for Australian local governments. Accounting, Accountability and Performance, 6(2), 89-106.

Schild, R. (2016). Environmental citizenship: What can political theory contribute to environmental education practice? Journal of Environmental Education, 47(1), 19–34.

Spatari, S., Yu, Z., & Montalto, F. A. (2011). Life cycle implications of urban green infrastructure. Environmental Pollution, 159(8–9), 2174–2179.

Tsai, F. M., Bui, T. D., Tseng, M. L., & Wu, K. J. (2020). A causal municipal solid waste management model for sustainable cities in Vietnam under uncertainty: A comparison. Resources, Conservation and Recycling, 154. https://doi.org/10.1016/j.resconrec.2019.104599

Wajim, J. (2020). Impacts Of Deforestation On Socio-Economic Development And Environment In Nigeria. The International Journal of Social Sciences and Humanities Invention, 7(03), 5852–5863.

Wang, Z., Lv, J., Gu, F., Yang, J., & Guo, J. (2020). Environmental and economic performance of an integrated municipal solid waste treatment: A Chinese case study. Science of the Total Environment, 709.

Wei, Q. (2020). Central Environmental Protection Supervisor, Nature of Property Rights and Corporate Financial Performance. Modern Economy, 11(03), 669–685.

Wojtowicz, K., & Hodzic, S. (2021). Relationship between fiscal sustainability and efficiency: Evidence from large cities in Poland. Economics & Sociology, 14(3), 163–184.

Zhang, Y., Wei, J., Zhu, Y., & George-Ufot, G. (2020). Untangling the relationship between Corporate Environmental Performance and Corporate Financial Performance: The double-edged moderating effects of environmental uncertainty. Journal of Cleaner Production, 263.

Zvobgo, L., & Tsoka, J. (2021). Deforestation rate and causes in Upper Manyame Sub-Catchment, Zimbabwe: Implications on achieving national climate change mitigation targets. Trees, Forests and People, 5.

Published

2023-08-30

How to Cite

Mukwarami, S. ., & van der Poll, H. M. . (2023). Environmental Management Expenditure and Fiscal Sustainability of South African Urban Municipalities: A Panel Data Model. Indonesian Journal of Social and Environmental Issues (IJSEI), 4(2), 171-183. https://doi.org/10.47540/ijsei.v4i2.942

Issue

Section

Articles