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Assessing Cost Recovery

A New Comparative Framework in Line with WFD Article 9

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Britta Ammermüller

This study proposes a comparative accounting framework for assessing cost recovery of water supply and sewerage services for households and agriculture in line with the requirements of Article 9 of the EU Water Framework Directive (WFD). It provides an integrative analysis of the partly contradictory objectives of Article 9 and the Directive’s approach to cost recovery. The book defines cost categories and accounting guidelines in line with the specific requirements of WFD Article 9. On this basis, an integrative framework for analysing different financing schemes for water services provision and their compliance with the objectives of Article 9 is developed, along with a pragmatic approach for the incorporation of environmental and resource costs in the overall cost recovery analysis.

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13 List of Figures Figure 1: The economic aspects of the WFD ............................................ 35 Figure 2: The explicit and implicit objectives of Article 9 ......................... 45 Figure 3: Transparency of costs and financing mechanisms of water services provision and sustainability of infrastructural systems ...................................................................................... 52 Figure 4: Article 9 objectives and associated requirements for the implementation process ............................................................ 54 Figure 5: Plan of the thesis ....................................................................... 58 Figure 6: Different Dimension of Water ................................................... 62 Figure 7: Total economic value and its composition ................................ 68 Figure 8: Classifying goods and services: excludability and rivalry ........... 70 Figure 9: The WFD cost categories put into perspective .......................... 87 Figure 10: Capital versus asset maintenance ............................................. 89 Figure 11: Elasticity of water demand along the demand curve ................ 124 Figure 12: The requirements of Article 9 for water services and water uses ............................................................................................ 144 Figure 13: Depicting the ‘ideal path’ to cost-recovery according to Article 9 ...................................................................................... 158 Figure 14: Overview on cost categories for the assessment of cost- recovery ..................................................................................... 162 Figure 15: Environmental costs .................................................................. 187 Figure 16: Step-wise approach for the assessment of environmental costs ........................................................................................... 189 Figure 17: Step-wise approach for the assessment of resource costs ....... 200 Figure 18: The Emscher river basin (embedded in the area commonly known as ‘Ruhr Area’) ............................................................... 239 Figure 19: Organisational structure of the Emschergenossenschaft .......... 246 Figure 20: Organisational structure of the Berliner Wasserbetriebe ......... 252 Figure 21: The case study area of the Consortio di Bonifica della Romagna Occidentale ................................................................ 257 Figure 22: Water protection zones operated by the Berliner Wasserbetriebe ......................................................................... 267 14 Figure 23: Overview on financing scheme for...

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