Assessing disproportionate costs to achieve good ecological status of water bodies in a Mediterranean river basin

Abstract

Water management is becoming increasingly important as the demand for water grows, diversifies, and includes more complex environmental concerns. The Water Framework Directive (WFD) seeks to achieve a good ecological status for all European Community water bodies by 2015. To achieve this objective, economic consideration of water management must be given to all decision-making processes. Exemption (time or level of stringency) from the objectives of the EU Directive can be justified by proving that the cost of implementing measures is disproportionate to the benefits. This paper addresses the issue of disproportionate costs through a cost-benefit analysis (CBA). To predict the costs, the function costs method is used. The quantification of environmental benefits is more complex, because they are not determined by the market. As an alternative to stated preference methods, we use the distance function approach to estimate the environmental benefits of improving water quality. We then apply this methodological approach to a Mediterranean River Basin in Spain. The results show that the achievement of good status could not be rejected based on the criterion of disproportionate costs in this river basin. This paper illustrates that CBA is a useful tool to inform policy and decision making. Furthermore, it is shown that economics, particularly the valuation of environmental benefits, plays a crucial role in fulfilling the environmental objectives of the WFD.