Water: Charging full cost can encourage more efficient use

Posted: Tuesday 1st October 2013

Flat-fee water charges are still common in parts of Europe. Such schemes, where users pay a fee regardless of the volume used, do not encourage efficient behaviour, either in households or agriculture, according to a new report from the European Environment Agency (EEA).

The EEA study, 'Assessment of cost recovery through water pricing', considers water pricing in several EU countries: Croatia, England and Wales, France, Germany, the Netherlands, Scotland, Serbia, Slovenia and Spain.

Water is under stress in many parts of Europe. Even in regions which usually experience a high level of rainfall, abstracting and cleaning water can have a high economic and environmental cost. This means that Europe needs to redouble efforts in using water more efficiently to avoid undermining its economy. Inefficient water use impacts hard on the resources needed by ecosystems and people.

In response to these problems, the report states that water should be priced at a level which both encourages efficient use and properly reflects its cost. This should include all costs of purifying and transporting the water. In addition, environmental and resource costs of water use, such as pollution and the depletion of resources, should also be internalised into water prices, the report says. Such charges should factor in lost 'ecosystem services' which also require water, for example wetlands carry out valuable services such as water purification and flood prevention.

The EU Water Framework Directive called for Member States to create incentives for efficient water use by 2010. However, it is unclear whether this has in fact resulted in any change in national policies.

Key findings

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