The principle of full cost recovery in the EU-water framework directive - Genesis and content

Journal of Environmental Law

Volumn 19, Issue 1, 2007, Pages 29-42

  Unnerstall, Herwig ^a  

^a HELMHOLTZ CENTRE FOR ENVIRONMENTAL RESEARCH UFZ   (Germany)

Author keywords

[No Author keywords available]

Indexed keywords

ENVIRONMENTAL POLICY; EUROPEAN UNION; WATER PLANNING;

EURASIA; EUROPE;

EID: 33847792109     PISSN: 09528873     EISSN: 1464374X     Source Type: Journal    
DOI: 10.1093/jel/eql038     Document Type: Article

References (64)

1. Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy; Brussels, OJ [2000] L327/01.
2. Cost recovery means income received from the direct sale of services or in any other way directly associated with the operation of a service, or: Extent to which the production or supply costs of a specific good or service is covered by the revenues; cf. DG ECO2 (Common Implementation Strategy Working Group 2B, Drafting Group ECO2), Assessment of Environmental and Resource Costs in the Water Framework Directive, June 2004.
3. Water services can be defined, preliminarily, as all services providing abstraction, impoundment, distribution and treatment of surface water or groundwater, including the provision of drinking water and waste water treatment. The scope and content of the relevant definition used in the WFD will be presented and discussed subsequently in section 3.
4. Cf M Kaika and B Page, 'The EU Water Framework Directive: Part 1. European Policy-Making and the Changing Topography of Lobbying', European Environment (2003).
5. European Commission, Proposal for a Council Directive establishing a framework for Community action in the field of water policy, COM/97/ 0049final SYN 97/0067, Brussels, OJ [1997] C184/20.
6. European Parliament, Proposal and amended proposals for a Council Directive establishing a framework for Community action in the field of water policy (COM(97)0049 - C4-0192/97, COM(97)0614 - C4-0120/98 and COM(98)0076 - C4-0121/98 - 7/0067(SYN)), A4-0261/98, Brussels, OJ [1999] C150/388.
7. Supra n 5.
8. European Council, Common Position (EC) No 41/1999 adopted by the Council on 22 October 1999 with a view to the adoption of a Directive 1999/./EC of the European Parliament and of the Council establishing a framework for Community action in the field of water policy, Brussels, OJ [1999] C343/01.
9. European Parliament, European Parliament legislative resolution on the common position adopted by the Council with a view to the adoption of a European Parliament and Council directive establishing a framework for Community action in the field of water policy, 9085/3/1999 - C5-0209/ 1999 - 1997/0067(COD), A5-0027/2000, 16 February 2000; Brussels, OJ [2000] C339/136.
10. European Parliament, Recommendation for the second reading on the common position adopted by the Council with a view to the adoption of a European Parliament and Council directive on establishing a framework for Community action in the field of water policy, 9085/3/1999 - C5-0209/ 1999- 1997/0067(COD), A5-0027/2000, PE 231.746, Brussels, 3 February 2000.
11. Supra n 9.
12. Supra n 9.
13. Supra n 10.
14. The notion 'polluter pays principle' is closely connected to the notion of 'external effects', that are positive or negative consequences resulting from activities (consumption or production) of a subject that concern a third party but are not monetarily expressed, i.e. not regulated by the market and cannot be, therefore, part of the calculation of the financial costs of the activity. This is the common understanding in economics. Only those who restrict the consequences to those on 'property rights of others' may draw a different conclusion (e.g. RE Cordato, The Polluter Pays Principle: A Proper Guide for Environmental Policy, http://www.newcoalition.org/ Article.cfm?artId=8241; date of access: 22.4.2006), but this already excludes all public goods, and as long there is no definition of the possible contents of property rights nothing is really said. However, this approach is in contradiction to the tradition of economic thinking.
15. European Parliament, Report on the joint text approved by the Conciliation Committee for a European Parliament and Council directive establishing a framework for Community action in the field of water policy (C5-0347/2000 - 1997/0067(COD)), A5-0214/2000, Brussels, 29 August 2000.
16. European Commission, Opinion of the Commission pursuant to Artcle 251(2)(c) of the EC Treaty, on the European Parliament's amendments to the Council's common position regarding the Proposal for a European Parliament and Council Directive establishing a framework for Community action in the field of water policy (COM(97)49final, COM(97)614 final, COM(98)76 final and COM(99)271 final) amending the proposal of the Commission pursuant to Art. 250 (2) of the EC Treaty; COM (2000) 219 final, 1997/0067 (COD), Brussels, 05 June 2000.
17. W. Kahlenborn, Umwelt- und Ressourcenkosten von Wassernutzungen vor dem Hintergrund der künftigen Wasserrahmenrichtlinie der Europäischen Gemeinschaft, Endgültiger Endbericht, November 1999 at 19 ff.
18. WATECO (CIS Working Group 2.6 on Water and Economics), Economics and the Environment - The Implementation Challenge of the Water Framework Directive, Guidance Document and Annexes, 2002, http://forum.europa.eu.int/Public/irc/env/wfd/library?l=/ framework_directive/guidance_documents/economic_wateco&vm= detailed&sb=Title
19. Ibid at Annex II.III.1.
20. H Brackemann, H-P Ewens, E Interwies, AR Kraemer, A Quadflieg, 'Die wirtschaftliche Analyse nach der EG-Wasserrahmenrichtlinie (Teil 1)', 4 Wasser und Abfall (2002, Issue No. 3) at 39.
21. WATECO, supra n 17, Annex IV.I.40
22. and LAWA (German Working Group of the Federal States on water issues), Arbeitshilfe zur Umsetzung der EG-Wasserrahmenrichtlinie: Themenbezogenes Arbeitspapier Nr. 5 (Version of 27 February 2002),
23. now dissenting LAWA, German Guidance Document for the implementation of the EC Water Framework Directive (Updated Version of 30 April 2003) at 80.
24. WATECO, supra n 17 at Annex IV.I.40.
25. WATECO, supra n 17 at Annex II.III.2.
26. LAWA, supra n 20 (2003), at 80.
27. WATECO has not dealt with this problem: Supra n 17 at Annex IV.I.28.
28. Cf e.g. WJ Baumol and W. Oates, 'The Use of Standards and Prices for the Protection of the Environment' in 73 Swedish Journal of Economics (1971) at 42 ff.
29. Supra n 5.
30. European Commission, Communication from the Commission to the Council, the European Parliament and the Economic and Social Committee - Pricing policies for enhancing the sustainability of water resources, COM(2000) 477 final of 26.07.2000 at 10.
31. Ibid at 17.
32. Implicitly also the European Court of Justice, when it required for the fixing of the adequate compensation for discharging public service obligations as 'basis of an analysis of the costs which a typical undertaking, well run..., would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations' (Case-C280/00 Altmark Trans [2003] ECR I-07747, para 93).
33. WATECO, supra n 17 at IV.I. 14 ff.
34. Supra n 27 at 10.
35. Similar WATECO, supra n 17 at Annex IV.1.18
36. and Kahlenborn supra n 16 at 18.
37. Direct damage to individuals caused by the provision of water services are recovered by the system of civil law. They are part of the maintenance costs.
38. Similar WATECO, supra n 17, Annex IV.1.17. According to WATECO over-abstraction of groundwater is also to be applied on a yearly basis (Annex IV.I.19).
39. Cf P Dasgupta and G Heal, Economic Theory and Exhaustible Resources (Cambridge University Press, London, 1979) at 164.
40. Instructive examples are provided by Kahlenborn, supra n 16 at 14.
41. Now with explicit reference to Similar WATECO, supra n 17,
42. dissenting DG ECO2, supra n 2 at 2;
43. critically B Görlach, E Interwies, B Pielen and B Rathje, Assessing Environmental and Resource Costs in the Water Framework Directive: The Case of Germany, Final Report (2004) at 9 and 13ff.
44. WATECO, supra n 17 at Annex IV.1.14;
45. cf E Roth, Water Pricing in the EU (EEB (European Environmental Bureau) Publication 2001/002) at 13 ff.
46. WATECO, supra n 17 Annex IV.I.14.
47. E. Ems, Environmental Liability in the EU - Application of the Polluter-pays Principle? (http://www.snee.org/ publikationer_show.asp?id=179; Accessed: 16 May 2006).
48. B Groosman, 'Pollution Tax', in: B Bouckaert and G De Geest (eds), Encyclopedia of Law and Economics, Volume II. Civil Law and Economics (Edward Elgar, Cheltenham, 2000) at 549.
49. Ems, supra n 39 at 2.
50. Groosman, supra n 40 at 549.
51. A Kampas and L Franckx, 'On the regulatory choice of refunding rules to reconcile the 'polluter pays principle' and Pigouvian taxation: An application' in 23 Environment and Planning C (2005) at 142.
52. Ems, supra n 39 at 3.
53. Millennium Ecosystem Assessment, Ecosystems and Human Well-Being: A Framework for Assessment (Island Press, Washington DC, 2003) at 132 f.
54. Dissenting N de Sadeleer, Environmental Principles (Oxford University Press, Oxford, 2002) at 52.
55. Millennium Ecosystem Assessment, supra n 45 at 133.
56. Millennium Ecosystem Assessment, supra n 45 at 135.
57. See Sadeleer, supra n 46 at 44.
58. See Baumol and Oates, supra n 26.
59. Similar Sadeleer, supra n 46 at 44.
60. Cf Sadeleer, supra n 46 at 38 f.
61. As to other environmental services that are impaired by diffuse pollution: They are beyond the scope of the cost recovery principle.
62. Cf DG Environment, Environment Directorate General Working Paper on Prevention and Restoration of Significant Environmental Damage (Environmental Liability), http://ec.europa.eu/comm/environment/ liability/consultation_en.pdf (Accessed: 16 May 2006).
63. Cf H Unnerstall and F Messner, 'Cost Recovery Water Prices for River Basin Management - Perspectives in Germany and the EU' in J Erickson, F Messner, I Ring (eds), Ecological Economics of Sustainable Watershed Management. Elsevier Science. Series on Advances in the Economics of Environmental Resources (in press).
64. Supra n 17 and n 2, respectively.