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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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1 Introduction 19

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19 1 Introduction Water is not a commercial product like any other but, rather, a heritage which must be protected, defended and treated as such. EC Water Framework Directive (2000/60/EC), Preamble (1) Fresh water resources are essential for sustaining life on our planet, enabling economic development and maintaining environmental services. An integrated approach for ensuring the sustainability of fresh water resources use has, how- ever, long been neglected in European water policy. Today, the sustainability of many European river basins is at stake, both in terms of quantitative availability as well as in qualitative terms (EUROPEAN COMMISSION 2007, GLEICK ET AL. 2001, EUROPEAN PARLIAMENT AND EUROPEAN COUNCIL 2000). Over-abstractions put many aquifers and wetlands in Europe at risk. This problem is strongest in Southern Europe, but extends more and more to regions in the north of Europe. In con- sequence, the ecological status of river basins degrades, ecosystem services can no longer be fully provided for and the survival of aquatic species is threatened. With increasing imbalances at the regional level between supply and demand, intersectoral and interregional competition for water resources increases. These water quantity problems often amplify existing problems of water quality and pollution (EUROPEAN COMMISSION 2000). While the number of heavily pollut- ed rivers has decreased over the past twenty years, also due to concerted actions by international river basin authorities, quality improvements are main- ly recorded in large rivers and diffuse pollution, particularly from agriculture, remains problematic throughout Europe. Against this background of increasing water scarcity...

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