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Economic analysis related to RBMP development and implementation
1. 1
ECONOMIC ANALYSIS RELATED TO
RBMP DEVELOPMENT AND
IMPLEMENTATION
UNECE / OECD / EU MS Consortium
Paris, 27 Nov. 2019
European Union Water Initiative Plus for Eastern Partnership Countries
REGIONAL CAPACITY BUILDING EVENT
5. 5
Article 5: Economic analysis of
water use
Article 9: Recovery of costs for
water services
Article 6: register of protected areas
areas for the protection of economically significant aquatic species
Article 4: Analysis of
disproportionate costs
Article 11: Costing the
programme of measures,
develop cost recovery
7. 7
EVOLUTION OF WATER USES
Georgia – Analysis of water abstraction by fisheries
: Number of Water Abstractors and Share in Total Water Abstraction by Fisheries (Among
the License Owner Abstractors)
0%
1%
2%
3%
4%
5%
6%
7%
8%
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016 2017 2018
Number of water abstractors (Fishery) Share in water abstraction
11. 11
COST RECOVERY
Moldova – Cost recovery of water supply and sanitation services in the
Danube-Prut-Black Sea RB
Income and expenditures of main water supply services in the Danube-Prut-Black Sea RB
(2017)
12. 12
PROGRAMME OF MEASURES
Belarus – Estimating the cost of the programme of measures in the
Dnieper River Basin
Estimated costs of 2019-2024 Dniepr Programme of measures (Belarus)
13. 13
Implementation of measures has a cost as
well as inaction
Environment and ecosystems have a
value and this value is significant
Numerous scales and indicators: data to be
shared and selected
Economic valuations mixes monetary
valuation and non-monetary units
A social process to construct values and
prepare the future in a River Basin
16. 16
HOW TO MOTIVATE SOMEONE TO DO SOMETHING?
1. REGULATION (INCL. CONTROLS)
2. FINANCIAL INCENTIVE (FEES, SUBSIDIES)
3. AWARENESS, VOLUNTARY ACTIONS
4. SOFT WIRING, MEDIA COVERAGE
LEVERS FOR RBMP IMPLEMENTATION
17. Financial flows: Water agency financial incentive
Charges, fees
Financial
assistance
Municipalities Industry Farmers
Operating costs
Assessment
Monitoring
Abstraction
Pollution
Water agency
Budget
financial incentive International Cooperarion
18. Project
owners
Regulation Budget
Motivation and information about
the form of the subsidies:
works, territory, subsidies rate
Eligibility
Payment of the subsidies
Project
How to allocate fees/earmarked charges?
River basin
management plan
Checking
Six-year programme (subsidies scheme)
approved by basin committee
19. Water users &
water polluters
PROGRAMMEOFMEASURES
Incentive
instruments
Coordination & integration
Institutions
What are the current mechanisms
to fund the programme of measures?
21. Water fees
Taxes (local
and national)
Local, National &
European
budgets
ACTIONPLAN
Household
Farmers
Industry
Commercial
activities
Other: fishermen
Taxpayers
Water agency
budget
Direct payers
Indirect payers
Polluter user
pays systems
What are the current mechanisms
to fund the programme of measures?
Basin
committee
Water users &
water polluters
Incentive
instruments
Coordination & integration
Institutions
22. Water fees
Taxes (local
and national)
Local, national &
European
budgets
Household
Farmers
Industry
Commercial
activities
Other: fishermen
Taxpayers
Water agency
budget
Direct payers
Indirect payers
Polluter user
pays systems
What are the current mechanisms
to fund the programme of measures?
Basin
committee
Water users &
water polluters
Incentive
instruments
Coordination & integration
Institutions
Project owners
23. 12%
48%
38%
32%
11%
10%
12%
7%
27%
3%
0% 20% 40% 60% 80% 100%
Aides
Redevances/
impôts
Water financing in Loire-Bretagne River Basin
Tax
Fees
Subsidies
23
Economic analysis main results:
financial transfers
Users & taxpayers
Tax Payers Households Craft Industry
Agriculture
Environment Households Craft Industry Agriculture
Public subsidies from Europe,
State, local authorities
25. Users directory
SUSTAINABLE FUNDING STRATEGY
WATER SOLIDARITY
Water fees
Environmental
benefits
Ability to pay
Existing plans
Users self-financing
time
26. Bassin Loire-Bretagne : évolution de la qualité sur le Phosphore total
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
Pourcentagedemesuresdansleseauxdesurface
très mauvaise
mauvaise
passable
bonne
très bonne
Preventive measure:
Phosphorus reduction in detergents
Curative measure: Improvement of
waste water treatement
Loire-Brittany River Basin: Phosphorus evolution in surface water%analysisresultsinsurfacewater
Very bad
Bad
Moderate
Good
Very good
27. 27
• PLAN WITH FEASIBLE AND REALISTIC PROGRAMME OF
MEASURES IN CONNEXION WITH EXISTING SECTORAL PLANS,
DISSEMINATED, AND FULLY UNDERSTOOD
• RBMP WITH A LEGAL SCOPE AND FIXED-TERM
• CONSISTENCY BETWEEN POLICIES: HEALTH, ENERGY,
AGRICULTURE, TRANSPORT, LAND MANAGEMENT, ETC
• PROJECT OWNERS AND HUMAN RESOURCES FOR
ADMINISTRATIVE MANAGEMENT, TECHNICAL MANAGEMENT,
ANIMATION, EVALUATION
KEYS FOR RBMP IMPLEMENTATION
Formal exercise
Economic analysis could be considered as a guiding principle for the different RBMP chapters.
Economic analysis drives to main questions, rough estimation, and order of magnitude.
Data available and data sharing : first step IWRM. To be collected at the smaller administrative unit.
Mapping for strategy
Water Services include all services (public or private) of abstraction, storage, treatment and distribution of surface water or groundwater, along with wastewater collection and treatment facilities,
Water Uses are all activities that have a significant impact on water status,
Ecosystem Services: another concept
Extract from RBMP economic analysis. Nearing completion
Trends to identify future needs
Scenario to estimate the trend and future needs and investments
WFD art. 9: polluter pays principle
Cost recovery: To improve the transparency of water financing; To explain who bears the costs (households, industry, agriculture); To identify the financing arrangements. Who pays for what?
First step: identification of tariffs
In this case, cost recovey > 100%. All expenses are covered by services revenues + savings for future investments.
An ideal objective is that the water bills cover all the operating costs of sanitation & water supply. To reach this goal, WFD requests transparency and trend to the full cost recovery
Just one utility has a cost recovery > 100%
Ability to pay: water price < 3% household incomes
The Program of Measures must be ambitious and, in other hand, realistic in accordance with financial capacities and human resources
The Programme of Measures must not deteriorate cost recovery but contribute to improve it.
Cost of measure = unit cost (national or basin level) x basis for calculation (WB level)
Cycle 2019-2024: 233 million € including 168 million € for Minsk WWTP
= 0.2% GDP/year generated in the River Basin
10 €/inhabitant/year or 0,08 €/m3 abstracted/year
environmental costs estimation is not the priority for 1st generation
More relevant data
Links not so easy to describe between uses and pressures and impacts on water resources
Conclusion: experts involved in each country for this first generation.
WORKS: the most expensive
FR: 60’s 70’s reduce main discharges and abstractions in order to allow all uses. Simple RBMP focused on point sources. Few partners, public organisation, big enterprises.
Since 90’s: diffuse sources pollution. Many actors, private money, smaller organisations
21st century: hydromorphological. Actors to be motivated! Animation necesary
Use all the levers!
Controls (water police)
Strengthen exchanges between ministries and line agencies, with stakeholders involved in measures implementation
Define responsibilities at River Basin level (central and local authorities, river basin organisations, users) incl. coordination, secretariat, animation
Organise a funding strategy (steady economic process) step by step
Promote cost-efficiency actions and “no regret” actions (protect health, saving water, wetlands protection, etc)
e.g. voluntary actions: selective waste sorting, phosphate-free detergents
Art. 9 Polluter pays principle
Steady economic process
Water Agencies activities
12 billion EUROS 2019-2024
Eligibility: rules depend on amount
Contribute to
Project owners: investment from private resources, dedicated resources (water bills)
23
RBMP: a tool to negoatiate with DONORS
Step by step process
Increase the knowledge on water pollution (better implementation of the PPP). Complete understanding increases acceptability and involvement of users.
New economics instruments: assessment of benefits from the water management => a long term visibility of IWRM’s effects.
Synergies
Sampling of phosphorus
Arbitration: mandates of basin organisation, responsibilities
RBMP is effective against administrative acts, against third parties;
Sectoral plans, land management are consistent and/or compliant with RBMP;
RBMP defines areas to be protected;
To be funded, a project must be consistent and/or compliant with the RBMP.