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A Note on the Implementation of the Economics of the EU Water Framework Directive under Data Limitations: A rapid appraisal approach

Phoebe Koundouri (), Kyriaki Remoundou () and Yiannis Kountouris ()

No 1008, DEOS Working Papers from Athens University of Economics and Business

Abstract: The purpose of this paper is to explore a 'rapid appraisal' methodology for the assessment of the cost recovery level for water services, according to the provisions of the Water Framework Directive (WFD). We argue that a full and rigorous implementation of the economic aspects of this legislation is not always possible because of informational deficiencies and severe time-constraints. Hence some 'second best' approach is required. Results are intended to assist researchers and policy makers in countries facing severe data gaps, to proceed with the implementation of the economic elements of WFD. Based on existing secondary data sources that identify the main pressures for water resources in each river basin district (RBD) and characterize the RBDs according to pollution loads, we calculate the financial, environmental and resource cost associated with the provision of water services for households, agriculture and industry. Then the level of compliance with the WFD's objective of full cost recovery according to the polluter pays principle is evaluated and policy recommendations to improve the current recovery level are discussed. The suggested approach is applied to Greece and results show that existing pricing policies in both domestic and agricultural sectors fail to achieve full cost recovery.

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