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Understanding Economics in Water Framework Directive Implementation

This document discusses the economic aspects essential for implementing the Water Framework Directive (WFD) and the Water Environment and Water Services (WEWS) Act. It emphasizes the necessity of economic analysis in assessing water use, establishing effective water pricing policies, and ensuring cost recovery for water services. The discussion highlights the importance of taking appropriate actions to manage water resources efficiently while considering social, environmental, and economic impacts.

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Understanding Economics in Water Framework Directive Implementation

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  1. WFD & Economics Tom Harvie-Clark & Eric McRory 29 October 2003

  2. Tom Why bother? What’s required? Eric How we do it? What we do? Overview

  3. Why Bother? Required • Article 5 (& Annex III), Article 9 of WFD • Section 5 (2) (c) of WEWS Act Crucial to our understanding Opportunity • Take action in most effective way • Avoid inappropriate action

  4. What Economics is Required? • Economic analysis of water use (end 2004) • Economic importance of water use • Dynamics of Water Use (Baseline Scenario) • Recovery of costs of water services • Allow judgements about most cost-effective combination of measures

  5. What Economics is Required? • Water Pricing policies to provide “adequate” incentive to use water resources efficiently, taking account of polluter pays principles • “adequate contribution” disaggregated to at least industry, household and agriculture groups • recovery includes environmental and resource (opportunity) costs • can have regards to social, environmental and economic effects and can continue established practices • Report in RBPM

  6. What Economics is Required? • Role in justifying Derogations • Heavily modified water bodies • Time or objective derogation • Disproportionate cost, not just cost>benefit

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