Call for full costs of water to be recovered from users in Europe
Posted by: Metering.com
October 2, 2013
A new report from the European Environment Agency (EEA) has called for the full costs of water to be recovered from users in order to reduce waste – and if implemented would lead to the expansion of water metering throughout Europe.
According to the report, Assessment of cost recovery through water pricing, 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 high economic and environmental costs.
On top of this flat-fee water charges, where users pay a fee regardless of the volume used, are still common in parts of Europe – which do not encourage efficient behavior, either in households or agriculture.
The study considers water pricing in several EU countries, including Croatia, England and Wales, France, Germany, the Netherlands, Scotland, Serbia, Slovenia and Spain. Among the findings are a varying degree of cost recovery between countries and between water-use sectors, and inelasticity in water pricing.
The report proposes 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 internalized into the water price.
“In many parts of Europe, profligate water use is a real problem,” commented Hans Bruyninckx, EEA executive director. “However, there is a lot of potential for Europe to cut water use by improving efficiency. Charging water users for the volume of water they actually use, at a price reflecting the true cost, sends an important signal – freshwater is a limited and precious resource.”
The report states that an ‘optimal’ water pricing system is likely to have a substantial variable component (i.e. a price charged per cubic meter of water used), based on volumetric or increasing block rates. The rates, which should be determined in a transparent way, should be high enough to enable investments in e.g. improvements by the water service suppliers, and should also reflect regional variations in water scarcity.
Currently under the EU Water Framework Directive, member states were required to create incentives for efficient water use by 2010. However, it is unclear whether this has resulted in any change in national policies.