Published : Sep 27,
2013 Last modified : Sep 27, 2013 01:18
PM - 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.
Hans Bruyninckx, EEA
Executive Director, said: In many parts
of Europe, profligate water use is a real
problem. 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 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
Households use around
a third less water when they are charged
for the actual amount they use. However,
flat-rate charging structures are still
common in many countries, even though such
tariffs are more expensive for most water
users and do not incentivise efficient water
use.
Some water uses, such as drinking water,
are not significantly influenced by changes
in price. However, studies show that other
uses are much more responsive, including
water for gardening or swimming pools.
The report lists some
examples of water use responding to pricing.
Urban water prices in Denmark increased
by 54 % between 1993 and 2004 along with
infrastructure investments. Over a decade
water use per person per day fell by almost
20 % to 125 liters, one of the lowest levels
of any OECD country. Water prices in the
Czech Republic increased in real terms since
11000, resulting in a 40 % decrease in domestic
water use.
In most countries, farmers
are also allowed to use unlimited water
for a flat charge. Charging for the volume
of water used reduces the amount of water
used by agriculture by 10 -20 %, according
to some studies. Switching to volumetric
charging is most successful when combined
with more modern irrigation technology and
work to fix leaks, the report says.
In most countries, household
water tariffs are designed to recover the
financial costs. In contrast, agricultural
water use is often heavily subsidised, so
the price covers as little as 20 % of costs
in some cases. In Spain, where some regions
are severely water-stressed, agricultural
water prices recover less than half of the
cost. This may encourage inefficient water
use, the report says.
When the price of using
water does not recover the full cost, some
of the cost may be inadvertently passed
on to others. For example, if industry pollutes
water and fails to pay for it to be cleaned,
these costs are imposed on society.
Low-income households
must also have access to affordable water
services, but keeping prices artificially
low for all users is not the best method,
the report says, as it may lead to a vicious
cycle of underfunded service providers with
poor infrastructure.
The public seems to support being charged
according to the volume of water they use
84 % of EU citizens agree with this principle
to some extent, according to a 2012 Eurobarometer
survey.