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Market News

 August 08, 2007
Water: Use less and pay more, says EU

 Brussels, Belgium - Increased water demand, coupled with factors related to climate change such as rising temperatures and melting alpine glaciers, are contributing to water scarcity and drought says the EU. The Commission has put forward a set of recommendations and policy options, including higher prices and conservation measures.

The Commission predicts that events such as the 2003 heat wave that killed thousands of elderly people in France and elsewhere in Europe will become more frequent and more severe, and will cost the EU billions of euros. "At least 100 billion euros" have already been spent on dealing with droughts and heat waves over the last 30 years, according to the Commission.

The Commission has put forward a set of recommendations and policy options, including higher prices and conservation measures. The Commission proposes higher water pricing as a means to "put an end to needless losses or waste" of water. It argues that the "'user pays' principle needs to become the rule" at EU level, "regardless of where the water comes from". With respect to the impact of higher water prices on the more disadvantaged sectors of the population, the Commission believes that "private households should, irrespective of their available financial resources, have access to adequate water provision".

Water pricing policies are part of a range of "market based instruments", which the Commission favours for dealing with certain environmental challenges. These other measures include:

Use less: Stricter metering requirements, designed to increase oversight of water use, and water-saving devices on showers, sinks and toilets are also given high importance in the communication. Up to 40 per cent of the EU's water resources are wasted, according to the Commission.

Water hierarchy: The construction of a new water supply infrastructure is seen as a last resort by the Commission, which places this option at the bottom of a suggested hierarchy for managing water scarcity. Water conservation is placed at the top of the hierarchy.

Existing rules: The Commission also calls for proper implementation of the existing Water Framework Directive (WFD), which introduces a model for water management based on geographical areas rather than on administrative or political boundaries. The WFD also requires member states to impose, by 2010, water pricing policies in order to encourage consumers to use water resources more efficiently. Although pricing policies are established in many EU states, others have no tradition of water pricing.

New laws: No new laws are proposed in the communication. However, a number of recommendations are put forward, including better land use planning for agriculture and tourism, new drought management plans, and increased use of water saving technologies in buildings. Further assessment of the "linkages" between water availability and the cultivation of crops for biofuels is also recommended.

Click here to view the EU Communication on freshwater EU freshwater policies