Evaluating Economic Policy Instruments for Sustainable Water Management in Europe (EPI-WATER)

Economic policy instruments (EPIs) have been used in the past to realise environmental policy objectives. A European-funded consortium made up of experts in the field of water economics was established to determine if EPIs can be applied to water management. The 'Evaluating economic policy instruments for sustainable water management in Europe' (EPI-WATER) project studied whether EPIs can complement or improve upon alternative policy instruments. The aim was to produce recommendations for better exploitation of the instruments' potential for achieving EU environmental objectives. Project partners also explored how the use of national accounts could support EPI design, implementation and evaluation in the field. A policy assessment framework was specifically designed for EPI-WATER. This enabled environmental and economic outcomes, transaction costs, distribution effects and the prospects of policy implementation to be assessed. The assessment framework was used together with a toolbox offering analytical, qualitative and other methods to produce a series of reports. Some 30 EPIs in Europe and 10 overseas were reviewed, together with a range of instruments. These economic instruments included charges and taxes, water pricing schemes, voluntary agreements, subsidies and certificates. By responding to various related EU directives and initiatives, EPI-WATER has contributed to more effective use of economic instruments to sustainably manage European water resources.