Economic prescriptions and policy applications in the implementation of the European Water Framework Directive

doi:10.1016/j.envsci.2012.06.002

Environmental Science & Policy

Volume 24, December 2012, Pages 83-91

https://doi.org/10.1016/j.envsci.2012.06.002 Get rights and content

Abstract

A key element of the European Water Framework Directive is the role that economic tools and principles have been assigned in achieving its objectives. This has raised important research and implementation questions that have set the water agenda in Europe in the last ten years and will continue to do so. This paper examines these key questions and reviews the progress that has been made in addressing them. Key research-policy challenges ahead are identified. These include addressing “wicked” problems, such as the operationalisation of the ecosystem service approach; challenging assumed principles for cost-effectiveness and disproportionality; and effectively co-constructing knowledge with stakeholders.

Highlights

► Comprehensive examination of economic aspects of WFD and challenges. ► Divergence between scientific economic prescriptions and policy applications. ► Normal science challenges ahead: method improvement (e.g. benefit transfer). ► Mode 2 science challenges: co-constructed ecosystem service approach.

Introduction

In October 2000, Directive 2000/60/CE entered into force leading to a substantial reform of water management in Europe. The objectives of the Water Framework Directive (WFD) are to stop deterioration and improve the state of aquatic ecosystems, and to promote the sustainable use of water by achieving ‘good ecological status’ (GES) in defined river basins. A key element is the role that economic tools and principles have been assigned in the WFD. This has raised important research and implementation questions that have set the water agenda in the last ten years and will continue to do so.

The first phase of the economic analysis, completed in 2007, entailed the characterisation of water uses and the construction of future scenarios, as well as studying the potential for cost recovery of water services.¹ In a second phase,² the focus lies on selecting on an economic basis the measures to be included in the programme of measures (PoMs), and assessing (dis)proportionality (whether costs outweigh benefits). This paper focusses on this second phase.

The literature on the WFD's economic analysis is fragmented and often focussed on economic analysis technicalities. The objective of this paper is to review and discuss the key economic research and implementation questions raised by the WFD and the way they have been addressed, through the discussion of some case studies in Europe. The progress to date is reviewed by looking specifically at the interface between economic scientific prescriptions and policy applications, analysing progress, difficulties and policy-science mismatches (Table 1). Remaining key research-policy challenges are then discussed.

Section snippets

Cost-effectiveness of PoMs

WFD requires that Member States shall make judgements about the most cost-effective combination of measures to be included in PoMs. Cost-effectiveness analysis (CEA), suggested by the non-binding advisory WATECO Group (EC, 2003), has been adopted in most national WFD guidelines.

CEA consists of: (i) setting a target; (ii) identifying appropriate measures; (iii) estimating costs and effectiveness of measures; (iv) ranking these according to a cost-effectiveness ratio; and (v) selecting the least

Environmental benefits

GES can only be derogated if it is proven that the costs of achieving it exceed the benefits it derives, including environmental benefits. The WFD therefore explicitly offers the opportunity to internalise positive externalities. However, real applications remain scarce, having mostly occurred as experimental studies in the academic realm.

WFD's (dis)proportionality

Derogations can be granted for an extension of the deadline for reaching GES and also the setting of a lower target.

According to the Directive, costs can be disproportionately high, firstly in relation to the financial ability to meet them, or secondly, compared to the benefits of meeting the objective. The first case is related to the ability to pay and cannot be a justification for setting a less ambitious target, it only warrants a postponement of the deadline. The WFD allows Member States a

Remaining challenges

Significant progress regarding the economic aspects of the WFD has been made by means of a large number of studies, some of them cited in this paper. However, it has been shown here that there is divergence between scientific prescriptions on how to undertake this analysis and the policy applications. Also, there are a number of issues that still remain unsolved.

To address these gaps and to help in the revisions of the river planning process, there are still a number of methodological

Conclusions

The WFD represents a major reform of the way water management is addressed in Europe and it calls for the developing of socio-ecological tools and frameworks for complex problem-solving. This requires a transdisciplinary approach, in which several scientific disciplines and strands of knowledge (including that of local stakeholders) come together. This paper aimed to provide clarification and discussions that are essential for other disciplines to understand the economics of the WFD in order to

Acknowledgements

Work funded by the Scottish Government Research Programme (WP2.3. Effectiveness of measures to manage water quality) and the REFRESH Project: Adaptive Strategies to Mitigate the Impacts of Climate Change on European Freshwater Ecosystems, EU Seventh Framework Programme (Grant Agreement: 244121): www.refresh.ucl.ac.uk. Deep thanks to Kirsty Blackstock and Andy Vinten (JHI) and Rebecca Badger (SEPA).

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View full text

Economic prescriptions and policy applications in the implementation of the European Water Framework Directive

Abstract

Highlights

Introduction

Section snippets

Cost-effectiveness of PoMs

Environmental benefits

WFD's (dis)proportionality

Remaining challenges

Conclusions

Acknowledgements

Ecological Economics

Journal of Health Economics

Journal of Arid Environments

Ecological Complexity

Science of the Total Environment

Ecological Economics

Journal of Environment Management

Ecological Economics

Resource and Energy Economics

Science of the Total Environment

Journal of Environment Management

Ecological Complexity

Journal of Environment Management

Agricultural Water Management

Ecological Economics

Environmental benefits of reclaimed water: an economic assessment in the context of the WFD

Water Policy

Report on the Benefits of WFD Programmes of Measure in England and Wales

Catchment Hydrology, Resources, Economics and Management: Integrated Modelling of WFD Impacts upon Rural Land Use and Farm Incomes. End of Award Report

Making benefit transfers work: deriving and testing principles for value transfers for similar and dissimilar sites

Environmental and Resource Economics

Economic analysis for ecosystem service assessment

Environmental and Resource Economics

Contrasting conventional with multi-level modeling approaches to meta-analysis: an illustration using UK woodland recreation values

Land Economy

Analyzing the agricultural costs and non-market benefits of implementing the Water Framework Directive

Journal of Agricultural Economics

Assessment of the draft hydrological basin plan of the Guadalquivir River Basin Spain

Water Resources Development

A cost-effectiveness analysis of water-saving measures for the WFD: the case of the Guadalquivir River Basin in Southern Spain

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Economic Valuation of Environmental and Resource Costs and Benefits in the WFD: Technical Guidelines for Practitioners

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Spatial preference heterogeneity: a choice experiment

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Water Resources Research