Policy summary

1 Introduction

2 Water pricing in the WFD and its effects on agriculture

2.1 General Overview WFD

2.2 WFD provisions with an impact on water pricing

2.2.1 Programmes of measures (Art.11 WFD)

2.2.2 Incentive pricing (Art. 9 WFD)

2.2.3 Cost-recovery (Art. 9 WFD)

2.2.4 The polluter-pays-principle

2.3 Key Messages

3 How to move towards sustainable water pricing policies in the context of WFD implementation?

3.1 Introducing the key concepts of WFD water pricing

3.1.1 The different cost categories of relevance for incentive pricing and cost recovery

3.1.2 Interpreting the ”adequate contribution” of water uses to the cost recovery of water services

3.2 Main challenges for water pricing in the WFD

3.2.1 Improving the information base on agricultural water pricing

3.2.2 Lower water consumption through higher prices? The issue of elasticities

3.2.3 The importance of other policies for achieving the WFD objectives

3.3 Approaches to incentive pricing in the WFD

3.3.1 Revising agricultural water tariff schemes

3.3.2 Using environmental charges and taxes in agricultural water pricing

3.4 Key Messages

4 The current Common Agricultural Policy and its payments

4.1 Payments under the current CAP to farmers

4.2 Structuring current CAP payments to farmers in accordance to their link to environmental quality standards

4.3 The role of decoupling for water protection

4.4 Key Messages

5 Water Pricing under CAP and WFD - Key issues for further discussion

5.1 Linkages on incentives

5.2 Proportionality/acceptability of potential measures to increase cost recovery/incentive pricing

5.3 Linking payments CAP-WFD: compensation function

5.4 Key Messages

6 Summary and Conclusion

7 Bibliography

Annex: List of CAP payments to farmers and their link to water quality standards