The economics of EU water policies experience and lessons...

The economics of EU water

policies – experience and

lessons learned from Europe

Thomas Dworak

Content

• General Principles of the water Framework Directive (WFD)

– Objectives

– River Basin Management Approach

– Implementation to attain objectives

• Economics within the WFD

– Economic Analysis

– Water Pricing

– Cost-effectiveness

– Disproportionate costs

• Lessons learned

Thomas Dworak - International Conference on Watershed Management

2

EU WATER MANAGEMENT

PRINCIPLES


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Water management before

2000

• Sector based approach with focus on

chemicals and nutrients

• Patchy legal EU requirements + several

national approaches

• “Stick driven approach prevail, almost no

carrots”

As a result in 2000 the Water Framework

Directive (WFD) was introduced


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Objective WFD

• “Good status” must be achieved by 2015 of all Community waters (inland surface and groundwaters and coastal waters)

• No further deterioration

• Use of water resources must be sustainable throughout Europe


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Key Principles

• Expand scope water protection to include all inland waters and coastal zones

• Achieve “good status” for all EU waters by 2015

• Base water management on river basins

• Use “combined approach” of emission limit values and quality standards and phase out certain substances

• Implement the polluter Pays principle

• Strengthen public participation

• Streamline previous water legislation

Ecologic Status: • Biological community • Hydrological characteristics • Chemical characteristics

Chemical Status: •Compliance with all the quality standards established for chemical substances at European level.

Two Elements: • Good Ecological Status • Good Chemical Status • (Quantative Status for groundwaters)

Quantitative Status: •Maintain environmental flows


6

River Basin Approach

• Use the natural geographical and hydrological unit - instead of according to administrative or political boundaries

• River Basin Management Plans (RBMP) for each river basin district

• Co-ordination on transboundary river basins


7

WFD Implementation Year Issue

2000 Directive entered into force

2003 Transposition Identification of River Basin management plan and Managing Authorities

2004 Characterisations of river basin: Pressures, impacts and economic analysis

2006 Establishment of monitoring network

2008 Draft RBMP and start public consultation (at latest)

2009 Finalize RBMP inlcuding programme of measures

2010 Introduce pricing policies

2012 Operationalize programme of measures

2015 Meet environment objectives, 1st management cycle ends, 2nd RBMPs

2021 2nd management cycle ends

2027 3rd management cycle ends, final deadline form meeting objectives


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Attaining WFD Objectives

• RBMPs including summaries of programmes of measures should be drawn up in order to reach the goal of “good status”

• Programmes of measures (POM) principle means of achieving environmental aims they: – are developed for each river basin district (transboundary)

– are based on a risk assessment of water bodies and economic aspects

– should include the most cost effective set of measures to tackle the pressures identified in the risk assessment

– have to be discussed with the public/stakeholders

– have to be renewed every 6 years


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ECONOMIC PRINCIPLES


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Why Economics under the

WFD?

• Improve decision making by increasing transparancy

• Set economic incentives to protect and save water

• Provide financing

• Prevent disproportional action


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12

10 YEARS LATER-

IMPLEMENTATION EXPERIENCES


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Current status of published

RBMP

GREEN - River Basin Management Plans adopted! YELLOW - consultations finalised, but awaiting adoption. RED - consultation have not started or ongoing.

Status 07/02/2011

Experiences WFD - general

• Increased understanding of the natural- socio-economic system

• Broader dialog among water users/polluters

• Increased understanding among countries sharing a basin

• Still several uncertainties (definition of good status, impacts of measures, etc.)

• Open questions – How to make POM operational?

– How to deal with conflicting policy objectives (e.g. renewable energy)

• Need to change behaviour to achieve objectives is not always accepted


15

Experiences WFD – Economic

issues I

• Majority of WFD economics work were undertaken by

multi-disciplinary teams:

– Economists dealt with methodological questions

– Non-economists undertook the data collection and

economic analysis.

• Most prominent difficulties – methodological and data

availability

• Three key challenging areas:

– selection of measures based on cost effectiveness criteria

– Judgement of disproportional costs.

– Implementation of water pricing


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issues II

• Positive implementation experiences:

– improving the effectiveness and transparency of the

implementation process

– strengthening the discussions between the various stakeholder

groups

– better decision making when developing the final POM

• some difficulties is integrating economics into the overall

decision-making process for WFD implementation


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issues III

• Transboundary cooperation – positive experiences but

some new technical and organisation challenges

– Lack of common definitions

– Data availability varies widely and comparison not always

possible

– Different methods applied in each MS

– Decision making takes place on different levels in different MS

– Not always same level of ambition

Thomas Dworak - International Conference

on Watershed Management 18

Some thoughts…

• Economics can be a very useful tool to support decision making and to increase transparency

• Implementing economics requires time and effort as the key concepts are often not understood by technical experts or the general public

• Several economic instruments exists - choose them carefully in accordance with the objectives you want to achieve

• Implementing / Optimizing economic instruments often requires new data- Make sure that it is collected right from the beginning

• Economic instruments are not the solution – they are part of a solution



Further information

• EU Guidance Documents see:

http://circa.europa.eu/Public/irc/env/wfd/library?l=/framework_directive/guidance_documents

• Relevant:

– Guidance No 01 - Economics

– Guidance No 03 - pressures and impacts

– Guidance No 08 - Public participation

– Guidance No 11 - Planning Process

– Guidance No 12 – Wetlands

– Guidance No 24 - River Basin Management in a Changing Climate





Thomas Dworak

Fresh-Thoughts Consulting

Auhofstr 4/7

1130 Vienna - Austria

[email protected]


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