Climate change – water sector High-Level Conference on Water, Climate and Health First International Forum on Development, Environment and Health Arezzo, Italy, November 20-23, 2012 Roberto Zocchi – Chair EU3
EUREAU – WHO WE ARE EUREAU is the European Federation of National Associations of Water and Wastewater Services. EUREAU gather 10.000 water & waste water utilities & operators across Europe that provide sustainable water services to around 405 million European citizens. • VISION • EUREAU aims for a provision of reliable and high quality water supply and waste water services which: • Protect public health; • Fully respect the natural environment; • Support economic development; • Socially acceptable
Climate change Climate change stress the water sector operational activity but mostly……the infrastructural needFINANCING ISSUE!
Application of the 3Ts Framework:Action plan and way forward, beyond Marseille Roberto Zocchi EU3 Chair 13 March 2012, Marseille
3Ts Framework Developed by OECD – applied by EUREAU, The 3Ts(Tariffs Taxes Transfers) framework represents a powerful tool in unlocking our understanding of the sources of the funds which underpin a sustainable future
3Ts Framework TAXES/Transf (Cap.Ex.) Tariff (Op.Ex. Cap.Ex.) • 3Ts concept into practice in order to promote: • A source contribution increasing transparency of the financing of water services and to facilitate the reporting obligations on the costs recovery principle (article 9 of European Water Framework Directive) • A useful diagnosis and decision-making tool • A means of informing on water services related investment targets • A tool to raise general awareness of sectorial financing issues Time….. Tariff (Op.Ex.) TAXES/Transf.
An appropriate mix of Tariffs, Taxes and Transfers: • to finance capital and recurrent costs in the long run, and • leverage other forms of finance (equity, loans, bonds) • Tariff policies that : • are affordable to all users, including the poorest • ensure the financial sustainability of service providers • provideappropriateincentives (consumption, efficiency) • Subsidy policies that : • are predictable and reliable to facilitate investment planning • meet social and environmental objectives • are affordable to national/local governments(message: if the local government or the public authorities want to make water services affordable for the poorest, the funds could be targeted to this specific population through social mechanisms, with financial resources not coming from water)
Sustainable Future - Recommendations (1) Relying on public funds or donors aids on a permanent basis is not consistent with the principle of sustainability of water services, and price policies and tariff structures have to incorporate a return on capital, consistent with the principle of “full cost recovery”, to cover the financing needs of the sector. Tariff structures should also ideally reflect the long-term fixed nature of investment. • Risingefficiency • Effectiveregulation • Economicleverage
Sustainable Future - Recommendations (2) maintenance holiday is an expensive short term thinking! ARE WE PROPERLY MANTAINIG WATER SERVICES ASSETS FOR THE FUTURE GENERATIONS? • ASSET RENEWAL (extimatedvalue) • 15 – 20 BillionEuros • PLANNED GLOBAL INVESTMENT (5 Yrs): 100/150 M€/Year • RisingStandards (ww new infrastructures):50/100 M€/Year • Maintenance (Ord/Extra; w/ww):45/50 M€/Year • (0,25%!.....400 Years!) Water Inflow Distribution Network Mains Aqueducts Storage Tanks Capacity Piezometers …… 479,8 Mm3/yr 5.482 km 878 km 208 km 480.388 m3 n. 6 … NOT ENOUGTH!! WE HAVE TO DO MORE!!WE ARE LEAVING PROBLEMS TO NEXT GENERATIONS!