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AARHUS UNIVERSITY (DENMARK)
Anders Branth Pedersen, Senior Researcher, Aarhus University, Denmark
5 October 2017, Committe...
Water stress and availability: issues & challenges
• Prevalent problem across parts of Europe (in
particular Southern Euro...
Water stress and availability: economic
policy instruments used
• Water pricing policies
• Water trading systems
• Taxes a...
Water stress and availability: case studies
Colourbox.com
Water stress and availability: revenues
• Large variation in size of revenue
• Many different options for using revenue, e...
Water stress and availability:
effectiveness & efficiency
• Large variation in effectiveness
• If levels are low limited e...
Water stress and availability: stakeholder &
civil society engagement
Water stress and availability: the way forward
• Concerns about potential adverse impacts of higher water prices on social...
Water stress and availability: who will need to increase
household water supply tariffs to reach full cost recovery
Source...
Case study presentations
• Case study 1: Pricing for irrigation and the cost of scarcity
• Christos Zoumides (the Cyprus I...
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Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 1 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 2 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 3 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 4 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 5 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 6 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 7 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 8 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 9 Water stress and availability: Policy issues, relevance of MBIs, key findings Slide 10
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This presentation was given at IEEP's capacity building for environmental tax reform conference on 5 October 2017 in Brussels, Belgium.

Speaker: Anders Branth Pedersen (Aarhus University-DCE)

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Water stress and availability: Policy issues, relevance of MBIs, key findings

  1. 1. AARHUS UNIVERSITY (DENMARK) Anders Branth Pedersen, Senior Researcher, Aarhus University, Denmark 5 October 2017, Committee of the Regions, Rue Belliard 99/101, Brussels Final conference: Capacity building for environmental tax reform Thematic session: Water stress and availability Colourbox.com
  2. 2. Water stress and availability: issues & challenges • Prevalent problem across parts of Europe (in particular Southern Europe). Expected to be further accelerated due to climate change • Activities in several economic sectors – in particular agriculture - results in pressure: water pollution, over abstraction etc. • The WFD has led to the adoption of various measures in Member States to implement its provisions including on cost recovery and incentive water pricing set out in Article 9. • Recovery of the costs should include not only operational costs but related “environmental and resource costs” • Solution: economic policy instruments
  3. 3. Water stress and availability: economic policy instruments used • Water pricing policies • Water trading systems • Taxes and charges on water abstraction • Payment for ecosystem services (PES) • Significant differences in design • Often exemptions/tax relief for agriculture/industries • Many countries have cost recovery of water services (prices cover operating costs), but only a few integrate environmental costs of water supply in the price Colourbox.com
  4. 4. Water stress and availability: case studies Colourbox.com
  5. 5. Water stress and availability: revenues • Large variation in size of revenue • Many different options for using revenue, e.g. • General government budget (CYP) • Water management related activities (POR) • Biodiversity protection (BUL) • Lowering of payroll taxes/green tax reform (DEN) • Financing of Water Agencies (FRA) • Investments and maintenance (Regional Water Authorities, NL) Colourbox.com
  6. 6. Water stress and availability: effectiveness & efficiency • Large variation in effectiveness • If levels are low limited effect on incentives • But also instruments with large env. effects, e.g. in NL and DK • Can stimulate innovation (NL) too • And targeted use of revenue can provide additional env. benefits (BUL) Colourbox.com
  7. 7. Water stress and availability: stakeholder & civil society engagement
  8. 8. Water stress and availability: the way forward • Concerns about potential adverse impacts of higher water prices on social equity are often exaggerated (see e.g. Cyprus case study) • Although water is a necessary good, its consumption is not entirely inelastic – pricing can lead to more cost-effective savings compared to other policy instruments • Revenue can be used strategically to support environmental protection (or to reduce resistance from target groups) • The Dutch cost recovery levy might be worth replicating in other Member States. The levy had a strong impact on business behaviour and further stimulated innovation • There do exist other taxes and charges with complex designs to learn from. Colourbox.com
  9. 9. Water stress and availability: who will need to increase household water supply tariffs to reach full cost recovery Source: Hogg, D. (et al.), 2016, STUDY ON ASSESSING THE ENVIRONMENTAL FISCAL REFORM POTENTIAL FOR THE EU28
  10. 10. Case study presentations • Case study 1: Pricing for irrigation and the cost of scarcity • Christos Zoumides (the Cyprus Institute) • Case study 2: The stake-pay-say principle in the Netherlands • Herman Havekes (Dutch Water Authorities)

This presentation was given at IEEP's capacity building for environmental tax reform conference on 5 October 2017 in Brussels, Belgium. Speaker: Anders Branth Pedersen (Aarhus University-DCE)

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