Eco-EcoC_trainer_manual by dandanhuanghuang


Go further 8
COMMENTS                                                                                  Eco-EcoC

Key ideas
Structure of the presentation: three aspects are addressed                                2/19
     economics in WFD process: from the preparation to the implementa-
     tion, what room is dedicated to economics?
     expectations of the use of economics: what input will the use of eco-
     nomics bring in the implementation of WFD, on the way the GES?
     implications in terms of decision-making: use economics when design-
     ing water policies is not common. What may this change?                 YOUR NOTES

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COMMENTS                                                                                      Eco-EcoC

Key ideas
Part 1: Where are economics in WFD process?                                                   3/19
As an introduction, this part reminds “the weight” of economics in WFD gen-
eral process: although all the presentation will focus on this aspect, this is
only a part of the issue.                                                                        1
                                                                                 YOUR NOTES

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COMMENTS                                                                                     Eco-EcoC

Key ideas
Economics and WFD have been linked from the very beginning of the elabora-                   4/19
tion process:
•   one statement which gave rise to WFD as we know it is that some of the
    previous water directives generated huge levels of investment (e.g. urban                   4
    wastewater directive). This led member states to demand for a pause and
    for a better assessment of the cost-benefit balance of future directives;
•   most debates on first drafts of the directive focused on the recovery of    YOUR NOTES
    costs: should a full cost recovery duty be set up or not? Other aspects
    linked to economics (pricing, use of economic methods to justify deroga-
    tions…) didn’t lead to discussions.
In practice, economics will also be very important in the implementation of
the directive, both as a tool used in the decision-making process and as a
measure to reach the goal. Though this is only one aspect of the directive
and of the implementation, it is essential.

Click on the “Info” icon in the left margin to switch to slide “Go further 2”
which provides the list of major references to economics in the text of WFD
(preamble, articles, annexes)

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WFD itself
Presentation WP-Water A addresses the origins and the contents of WFD.
COMMENTS                                                                                        Eco-EcoC

Key ideas
This slide provides a flow chart of the complete procedure and locates eco-                     5/19
nomic inputs:
    the black straw indicates the main tasks to be done
    the red straw refers to documents to be produced. Reporting is listed in
    the “actions” group as it is a duty and not a document;
•   the blue one presents specific actions to be carried out.
As one can see, economic input is very important. Of course, all inputs re-
                                                                                   YOUR NOTES
ferred to here don’t have the same importance. However, it is important to
see that economics are present all along the procedure: it is not a punctual but
a continuous contribution. Economists thus have to be included in “WFD action
teams” and cross exchanges of experience are needed between water profes-
sionals, decision-makers and economists. Specific efforts will also have to be
made to ensure good understanding by the public.

This slide is based on a chronological presentation. However, depending on
the needs, parameters of the animation may be changed in order to present
one straw after the other for instance.
It is not intended here to detail the all WFD procedure but only to locate eco-
nomic input. Though some comments may be made regarding WFD in general or
some specific aspects (derogations, pricing…), the estimated duration of the
presentation (60’) doesn’t include a long explanation of the current slide.

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COMMENTS                                                                                     Eco-EcoC

Key ideas
As all the presentation and the course focus on economic aspects in WFD, it                  6/19
is important to keep in mind that economics are only one contribution among
others. This is what this slide intends to remind.
All this stresses on the need of an integrated approach: all fields of exper-                   3
tise bring contributions that are interconnected.

                                                                                YOUR NOTES
Click on the “Info” icon in the left margin to switch to slide “Go further 3”
which provides elements about the explicit and implicit functions dedicated
to economics, as explained in the WATECO Guidance.

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COMMENTS                                                                                       Eco-EcoC

Key ideas
Part 2: What is expected from the use of economics?                                            7/19
The use of economics at several stages of implementation of WFD is in-
tended as a genuine contribution. Every time, an input is expected in the pro-
cess.                                                                                             1
This section intends to present main stages identified in slide 6 and their
role / usefulness in the process.
Each stage is presented formally: contents, schedule and economic input.          YOUR NOTES
There is no explanation on “how to do?” in this presentation. Reference to
the directive (article, annex) is made in the right corner on top of the slide.

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For case studies, refer to presentations WP-EcoB01 to B07
COMMENTS                                                                                        Eco-EcoC

This slide presents the first major stage from an economic point of view: the
characterisation of the district.
When describing the “economic weight” of water in the district, lots of eco-
nomic information will be needed, as well as “technical” ones (quality of water,
volumes of effluents discharged by the industry, households…, etc.). Both as-
pects are closely connected.
In this slide focus is put on “economics in practice” i.e. inputs based on an
economic analysis. This is the case for instance with regards to the calcula-      YOUR NOTES
tion of the level of recovery of costs.

One may note that reference is also made to combination of measures, what
may appear very anticipated. In fact, and as detailed in the WATECO Guid-
ance, this refers to measures applying where no potential gap with the GES is
reckoned for 2015. Indeed, the characterisation stage includes the con-
struction of a baseline scenario in order to estimate the potential to reach
the goal in time. This is why it is planned that judgements will be made on
relevant measures in such cases. Note that these are “judgements”: once a
general view of the programme of measures will be available lately, changes
may be necessary for several reasons (overall cost of measures, impact on
users, etc.).

Go further
Presentation WP-EcoB01: a case study on the analysis of the characteristics
of the basin.
COMMENTS                                                                                         Eco-EcoC

Key ideas
This slide provides general advice:                                                              9/19
•   from a methodological point of view, it is important to take account of
    next stages from the very beginning of the implementation. E.g. organise
    data in an efficient way as it will be used again later on, involve potential                   1
    partners so that they will more keen on contributing to a next stage (as
    they will understand the general process), identify precisely lacks of data
    as it may be necessary to organise structured collection later on (may be       YOUR NOTES
    as a measure in the programme of measures), etc.
•   from a general point of view, and as new activities will be launched in or-
    der to implement properly the directive, it is necessary to estimate what
    is really necessary and what is “extra information” in order to concen-
    trate on immediate needs. This will ensure efficiency but is also an eco-
    nomic matter, as extra efforts will have to be funded. All this may be im-
    proved later on and progressively, when preparing updates of the charac-
    terisation for instance. Lacks of data/knowledge will be identified, but it
    will not be necessary to fill them immediately: WFD may be implemented
    properly even if some decisions are based on proxies, estimates, etc.

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COMMENTS                                                                                           Eco-EcoC

Key ideas
Parallel to the characterisation of the district, the registration of protected                   10/19
areas will include an indirect economic side: it will include areas designated
for the protection of economically significant aquatic species.
The identification of these species (thus of their living areas) will require a                       1
certain level of economic analysis. In most cases, the economic significance
will certainly be linked with the possibility to fishing, either as a professional
or as a recreational activity. however, all fishing places may not be concerned      YOUR NOTES
depending on the understanding of the level of “significance”.
Besides, WFD refers to “aquatic species”, not only fishes. Aquatic crops may
locally be of high economic significance for instance.

The identification of such areas is likely to be the toughest at that stage, as
those requiring specific protection are often pre-identified. Besides, no in-
terpretation is needed in this case: areas are protected or not.

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COMMENTS                                                                                                          Eco-EcoC

Key ideas
Economic analysis will be highly useful in the designation of HMWB, though it                                    11/19
plays as the final criterion: e.g. technical feasibility of alternatives and envi-
ronmental aspects will be considered first.
However, in lots of cases (e.g. major infrastructures such as dams, hydropower                                       1
plants, etc.) debates will certainly concentrate de facto on economic aspects,
as technical feasibility of alternatives is likely to be very limited in such cases
for instance.                                                                                       YOUR NOTES
The use of economics in the HMWB designation procedure is original: it re-
fers to the concept of “disproportionate costs”, which is more detailed in:
•   slide 13 that gives a synthetic overview;
•   presentation WP-EcoB05 that provides a case study focusing on this issue.

Click on the “Info” icon in the left margin to switch to
•   slide “Go further 4”which provides a flow chart of the HMWB designation
•   slide “Go further 5” that proposes a table to identify the respective roles of
    parties involved in this procedure.

Go further
Presentation WP-EcoB04: a case study on the designation of HMWB.
WATECO Guidance documents. On disproportionate costs: see Accompanying
document, pp.166-178
COMMENTS                                                                                                          Eco-EcoC

Key ideas
WFD identifies two cases in which derogations may be sought:                                                     12/19
•   time derogations when the goal can’t be reached by 2015 but when a de-

    layed deadline may allow to reach GES;
    derogation on the objective, when time derogation doesn’t allow to reach
    the goal by 2027. A lower objective than GES may then be determined.
In both cases, economic analysis is a fundamental basis for justifying a dero-
gation: as for the designation of HMWB, it will ultimately be necessary to                          YOUR NOTES
determine whether the costs of the measures required to reach the goal are
disproportionate. Although HMWB are not considered as derogation cases by
WFD, HMWB and derogations are thus similar from the economic point of

Go further
Presentation WP-EcoB05: a case study on the disproportion of costs when
seeking derogation.
WATECO Guidance documents. On disproportionate costs: see Accompanying
document, pp.166-178
COMMENTS                                                                                                       Eco-EcoC

Key ideas
This slide gives a very light view of “disproportionate costs”, which is a fun-                               13/19
damental concept for the designation of HMWB and for the justification of
Though the “disproportion of costs” is an economic concept, it is not only a                                      1
matter of economy: several external aspects will have to be taken into ac-
count (e.g. environmental benefits, scale of the impact of the modification
considered, etc.).                                                                               YOUR NOTES
Besides, this procedure is a good example to demonstrate that economic analy-
sis will not provide ready-to-apply solutions: the disproportion of costs will vary
in time and from place to place, it will depend on local circumstances, etc. De-
bate is thus fundamental to make a decision here. Once again, the cross-
integration of economics, technical aspects and of decision-making is essential.

Go further
Presentation WP-EcoB05: a case study on the disproportion of costs when
seeking derogation.
WATECO Guidance documents. On disproportionate costs: see Accompanying
document, pp.166-178
COMMENTS                                                                                       Eco-EcoC

Key ideas
When designing the programme of measures, economic tools are used in two                      14/19
different ways:
•   as a tool to assess a) the cost-effectiveness of measures b) the impact of
    (sets of) measures and to ensure that the combination of all potential                        1
    measures doesn’t have undesired effects;
•   as a type of measures, through pricing in particular and more generally
    through economic and fiscal instruments                                      YOUR NOTES
Once again, the use of economic tools plays as a contribution in the making of
relevant water policies and not as a provider of ready-to-apply solutions. It
provides information and elements for a comparison between different potential
measures in order to ensure more transparent decisions.

Go further
Presentation WP-EcoB06: a case study on the construction of the programme
of measures
COMMENTS                                                                                                          Eco-EcoC

Key ideas
As previously mentioned, economic tools may also be used as measures con-                                        15/19
tributing to reach the goal.
WFD indicates two economic tools as basic measures:
•   water pricing policies, aiming at providing incentive for efficient water use;
•   recovery of costs of water services. This concept may be a bit difficult to
    understand and the precise content of the duty is often unclear. Do make
    clear that there is no duty to implement full cost recovery. The existing                       YOUR NOTES
    level will be assessed, then interested parties will debate on the relevance
    of this level. Decisions aiming at increasing the level of recovery for a
    given sector of activity will not only have to take account of the environ-
    mental impact of such a change but also of its socio-economic impact. As
    for the meaning of the concept of “recovery of costs”, some elements are
    provided in the “Go further” section (slides 6 to 8).

Click on the icon in the left margin to switch to three extra-slides which may
help to explain recovery of costs. Much more detailed elements are available
in presentation WP-EcoB03 based on a case study in the irrigation sector.

Go further
Presentation WP-EcoB03: a case study on the recovery of costs
WATECO Guidance documents. On cost recovery: see Accompanying docu-
ment, pp.100-113
COMMENTS                                                                                        Eco-EcoC

Key ideas
Part 3: What are the implications in terms of decision-making?                                 16/19
As the use of economics in the field of decision-making in the water sector
(at least in such in intensive and formalised way), implications may not be
clear to all actors. This novelty might bring changes in the existing organisa-                    1
tion, from several points of view: methods applied, actors involved, instru-
ments implemented, etc.
Although professionals, who know about methodologies, concepts, etc. will         YOUR NOTES
carry out economic analyses, these experts and their works will closely be in-
tegrated in the all WFD process, what is another type of novelty.

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COMMENTS                                                                                          Eco-EcoC

Key ideas
One key change induced by the WFD is a methodological one. Three implica-                        17/19
tions are suggested here, which cover a wide scope of aspects:
•   a structured process: WFD launches a cyclic and never-ended process and
    describes precisely the method to apply. For more elements on this aspect                        4
    see WP-WaterA presentation;
•   an open process, that involves all types of actors who have some interest
    in water issues and that is de facto (if not word by word) connected to all     YOUR NOTES
    aspects of water management, from quality to pricing, from quantity to
    environmental benefits, etc.
•   key decisions, particularly when they lead to non-respect of WFD, will
    have to be justified what means a clear basis for justification, transpar-
    ency vis-à-vis local actors as well as the Commission. All this implies a de-
    bate thus. Although in some cases economic analyses will be partial (e.g.
    due to lack of data), decision-makers and all actors involved will be aware
    of this, and will take this into account when debating and when deciding.
All this is of great novelty and will impact decision-making process, existing
relationships among actors, methods, procedures, etc.

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COMMENTS                                                                                          Eco-EcoC

Key ideas
A subsequent consequence of novelty induced by WFD is the use of unusual                         18/19
It is clear that economic instruments are generally not used that intensively
with such a high degree both of interaction of the technical approach and of                         4
integration in the decision-making process. A specific point is that the higher
the risk of non-compliance with WFD will appear, the more intensive the use
of economic tools will be necessary.                                                YOUR NOTES
Closely connected to this first statement is the fact that water pricing poli-
cies may be officially used as a tool to interact on uses of water. If this
sometimes happen, it is still quite unusual and is not often clearly stated.
Last but not least, the use of scenario is also unusual in this sector. It raises
methodological questions (how to cope with uncertainty, regarding for in-
stance the evolution of the quality of water by 2015?) and it will be funda-
mental as it will allow to identify potential gaps with the goal. It will be nec-
essary to make all actors understand the limits of the use of scenarios, the
methods applied and their implications (what it means if data come from ex-
perts saying instead of formal statements?).

Once again, all this is a great factor of novelty in water policies.

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COMMENTS                                                                                         Eco-EcoC

Key ideas
This slide intends to stress on the “integration” factor, which is fundamental                  19/19
in the economic side of the WFD process (if not in the all process):
•   economics must be deeply integrated in the implementation process, and
    not considered as an isolated exercise. This is made necessary by WFD it-                       5
    self, which imposes to carry out economic analyses prior to derogation
    procedures for instance. As a consequence, it is not possible to work on
    economic aspects without working together with water experts, as it is a       YOUR NOTES
    “eco-technical” procedure.
•   economics must also be integrated in the decision-making process what
    means easy understanding by all actors but also requires to do much more
    than simply deliver results of analyses: bias of the analyses, methods ap-
    plied and implications, etc. have to be explained to decision-makers at
    least. It is not possible to remain on the theoretical side: economic infor-
    mation is expected to directly feed the decision-making process.
This integration duty is to be clearly understood by all actors:
•   economists, who will have to adjust their methods and to share their
•   decision-makers who will have to use economic information together with
    other information and not to consider it as the decision. they will also
    have to pay interest to economic issues;
•   water professionals who will also have to open to economic methods, word-
    ing, tools, etc. and to share their “technical” knowledge with economists

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COMMENTS                                                                                      Eco-EcoC

Key ideas                                                                                 Go further 1

Go further section that provides complements to some of the slides of the
main presentation, regarding the role of economic analysis in WFD process,
and specific procedures (HMWB designation, recovery of costs).

Go further

                                                                             YOUR NOTES
COMMENTS                                                                                                             Eco-EcoC

Key ideas                                                                                                        Go further 2

This slide comes as a complement to slide 4.
It indicates the main references to economics that may be found in the di-

Go further
                                                                                                    YOUR NOTES
A comprehensive list of economic references is provided in the WATECO
guidance, with full quotations of the terms of the directive. See accompany-
ing documents, pp.19-25
COMMENTS                                                                                                    Eco-EcoC

Key ideas                                                                                               Go further 3

This slide supplements slide 6. It refers to informal classification proposed
by the WATECO guidance, between explicit and implicit functions given by
WFD to economics.
It is important to be aware of this distinction, as an intensive use of eco-
nomics doesn’t come directly from the legal text but is in many cases made
necessary in order to properly implement the directive.
As a consequence, WATECO Guidance shall be intensively used as a refer-                    YOUR NOTES
ence as it provides explanations on implicit uses of economics, suggests
methods to be applied, etc.

Go further
This classification is more detailed in the WATECO Guidance. See Main
document, pp.20-21.
COMMENTS                                                                                           Eco-EcoC

Key ideas                                                                                      Go further 4

This flow chart of the HMWB designation procedure gives an overview of the
different stages of this procedure.
It complements slide 11 as it identifies clearly where in the process economic
analysis is used. It also puts clearly that this analysis comes last and is the
final criterion to identify HMWB.

                                                                                  YOUR NOTES
Go further
For more elements on HMWB designation process and on the flow chart in
particular, see presentation WP-Water B04 and the referring trainer’s man-
COMMENTS                                                                                        Eco-EcoC

Key ideas                                                                                   Go further 5

this simple table indicates in broad terms who does what in the HMWB des-
ignation procedure. Once again, the necessary integration is put clearly, as
most steps require multidisciplinary work.
This slide may usefully supplement slide 11. It may also be used in order to
illustrate the “integration requirement”.

Go further                                                                     YOUR NOTES
COMMENTS                                                                                                             Eco-EcoC

Key ideas                                                                                                        Go further 6

Here is a very simple memo about recovery of costs. As indicated in the
comments regarding slide 15, this is a complex concept and it may be useful
to have a look at the dedicated presentation in order to have more detailed
elements to talk about this issue.
The present slide reminds the key elements about recovery i.e. the scope of
implementation. Note that there are two aspects linked to recovery in WFD:
•   an assessment of the level of recovery at the characterisation stage: it                        YOUR NOTES
    will provide a description of the situation;
•   the implementation of a certain level of recovery as requested by article
    9 (“an adequate contribution…”)

Go further
Presentation WP-EcoB03: a case study on the recovery of costs
WATECO Guidance documents. On cost recovery: see Accompanying docu-
ment, pp.100-113
COMMENTS                                                                                                             Eco-EcoC

Key ideas                                                                                                        Go further 7

The aim of this slide is to make available the definition of what water serv-
ices are. Indeed, this is the key definition with regards to the recovery of
costs: identify what “water services” are determines the scope of implemen-
tation of this principle and allows to estimate the level of recovery and to
adjust it if necessary.
Grossly speaking, water services are water uses for the purpose of which wa-
ter is diverted from its natural cycle by a work or equipment (e.g. pipe, pump,                     YOUR NOTES

Go further
Presentation WP-EcoB03: a case study on the recovery of costs
WATECO Guidance documents. On cost recovery: see Accompanying docu-
ment, pp.100-113
COMMENTS                                                                                                             Eco-EcoC

Key ideas                                                                                                        Go further 8

As water services, the scope of implementation of the principle of recovery,
are formally defined through a reference to water uses, this slide provides
the definition as well as an example of this last concept.
Again, you will find more elements on this point in the presentation dedicated
to recovery of costs, as well as in the “definitions slides” dedicated to
                                                                                                    YOUR NOTES
Go further
Presentation WP-EcoB03: a case study on the recovery of costs
Presentation Eco-EcoB: definitions and examples
WATECO Guidance documents. On cost recovery: see Accompanying docu-
ment, pp.100-113

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