water.europa.eu indepth assessment economic analysis progress report scg meeting 14-15 may 2008...
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water.europa.eu
Indepth assessment economic analysisprogress report
SCG meeting 14-15 May 2008
Maria Brättemark, Unit D.2, DG Environment, European Commission
Slide 2
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Outline
•Recall the 1st implementation report
•Scope of the in-depth assessment
•Initial conclusions
•Way forward
Slide 3
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0
5
10
15
20
25
Households Industry Agriculture
Sector
No
. of
Mem
ber
Sta
tes
MS providing noinformation
MS providingincompleteinformation
MS providing information
Implementation Results Article 5 analysis - 7
Information available on cost recovery
Slide 4
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0
5
10
15
20
25
Financial/ investmentcosts
Resource costs Environmental costs
Costs and factors included in analysis
No
. of
Mem
ber
Sta
tes
MS providing no information
MS providing incompleteinformation
MS providing information
Implementation Results Article 5 analysis - 8
Information available on costs considered for cost recovery
Slide 5
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Scope : in-depth assessment – annex IIIThe economic analysis shall contain enough information in sufficient
detail (taking account of the costs associated with collection of the
relevant data) in order to:
(a) make the relevant calculations necessary for taking into
account under Article 9 the principle of recovery of the costs of water
services, taking account of long term forecasts of supply and demand
for water in the River Basin District and, where necessary:
– estimates of the volume, prices and costs associated with water
services, and
– estimates of relevant investment including forecasts of such
investments;
(b) make judgements about the most cost effective combination of
measures in respect of water uses to be included in the programme of
measures under Article 11 based on estimates of the potential costs of
such measures.
Slide 6
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Scope : in-depth assessment – article 9 • principle of recovery of the costs of water services, including
environmental and resource costs,
• the polluter pays principle.
• that water pricing policies provide adequate incentives for users to
use water resources efficiently, and thereby contribute to the
environmental objectives of this Directive;
• an adequate contribution of the different water uses, disaggregated
into at least industry, households and agriculture,
• social, environmental and economic effects of the recovery + the
geographic and climatic conditions of the region or regions affected.
• funding of particular preventative or remedial measures in order to
achieve the objectives of this Directive.
• established practices for a given water use activity, where this does
not compromise the purposes and the achievement of the objectives
of this Directive.
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Why now ? • 2009 RBMP shall include - the planned steps towards implementing paragraph 1 which
will contribute to achieving the environmental objectives of
this Directive and on the contribution made by the various
water uses to the recovery of the costs of water services.- summary of the art 5 reports economic analysis
• Reality check on how the economic principles of the
WFD are implemented – but of 2005 progress…
• Reporting formats to be developed.
• Legal action - further dialogue with MS on progress
towards RBMP, key problems encountered – possibly
workshop 29-30.9.2008.
• Testing a methodology for 2010 in-depth assessments
Helps us to get early warning on poor performance …
Slide 8
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Questions asked indepth assessment
All relevant economic issues to be analysed and
reported:
1. Definition of water services and consideration of water uses
2. Level of cost recovery/which costs are included and how
2a. Sub-topic: Calculation of cost recovery
2b Sub-topic: Environmental and resource costs
2c Sub-topic: Incentive pricing
3. Baseline scenario
4. Information base for making judgements on cost
effectiveness of measures
Slide 9
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Overall impressions• Quality is diverse – but quality generally too poor
• Mixture of poor reporting and/or poor analysis
• Low level of technical links between economic analyis
and P&I analysis
• Level of detail reported often insufficient for the
preparation of implementation of article 9
• Low level of international coordination
• Few MS have reached sufficient “scores” – efforts are
needed; No MS sufficient efforts in all areas.
• A number of “good practices” however identified…
Slide 10
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Specific comments (1)Definition of water services and consideration of water
uses :- Some work done on water uses in most Member States, but links
with P&I weak- Links between water uses and the water services not well
developed- Narrow application of the term water services in a larger number of
cases- Different approaches to inclusion of self-services – examples of
excluded “self abstraction” for instance by industry is reported to be about 30 % - significant !
Cost recovery :-Big gaps in information on certain uses, in particular agriculture-Little work on water uses contribution to the costs of water services-Little consideration of environmental and resource costs – an even less quantified information on ERC
Slide 11
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Specific comment (2)Cost recovery (cont’d)
-No substantial information on considerations of polluter pays principles and little consideration of incentive properties of water pricing – core requirements of art 9
Baseline scenarios :- Some work done projections of trends, but rarely beyond 2015- WATECO recommendations on baseline rarely followed
Cost effectiveness analysis :-At the time of reporting these issues, one of the least developed areas were basis for developing cost-effective set of measures.
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Environment and resource costsERC mentioned (of 21 completed assessments) :- Agriculture : 6/21- Industry : 8/21- Households : 8/21- Other : 5/21
ERC calculated (of 21 completed assessments) :Agriculture : 4/21 *Industry : 5/21 *Households : 5/21 *Other : 3/21 *
*Partial calculations !
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Specific estimates water service volumes, prices and costs
(of 23 completed assessments) :
- Whole supply chain : 9/23 (partial 5/23)- Waste water treatment : 5/23 (partial 9/23)- Abstraction : 2/23 (partial 6/23)
- Impoundment : 0/23 (partial 0/23)
- Storage : 0/23 (partial 0/23)
- Treatment : 0/23 (partial 2/23)
- Distribution : 1/23 (partial 3/23)
Slide 14
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Way forward
• Finalisation of these internal reports – to support the legal
assessments of compliance with the WFD requirements
• Workshop - to seek dialogue on MS progress and COM
expectations on the economic components of the RBMP
• Request to Water Directors to update the list of contact
persons on water economics, for the purpose of this report,
but also other issues.
• Reporting formats – with WG D and network of economists –
to improve the reporting next time
• Legal action ?
Slide 15
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Other economic projects
- Handbook on economic assessment – contracted to
COWI.
- Competitiveness study
- Aquamoney
- Water scarcity : water demand scenarios.
- New projects in pipeline
- Exemptions - see other presentation