The valuation of environmental and resource costs plays a central role for the implementation of the EC Water Framework Directive (WFD). Benjamin Görlach and Eduard Interwies investigated many of the economic aspects – such as the cost recovery for water services, incentive pricing for water, or the selection of cost-effective measures. The study to the German Federal Environmental Agency was published.

In the implementation of the EC Water Framework Directive, the concept of environmental and resource costs applies above all to the cost recovery of water services. Article 9 of the Directive stipulates that "Member States shall take account of the principle of recovery of the costs of water services, including environmental and resource costs." However, environmental and resource costs were not sufficiently defined. In order to further clarify the concept of environmental and resource costs, and in order to discuss their assessment in practice, a European working group (DG Eco 2) was set up in September 2003.

This study first summarises some main results of this working group. It then describes how environmental and resource costs are currently dealt with in Germany, and examines how the results of the DG Eco 2 can be put to use in the German context. A further point is how to link the assessment of environmental and resource costs to the process of selecting cost-effective combinations of measures. Two options are discussed here: first, addressing the question whether and how information obtained through the selection of measures can be used to assess environmental and resources costs; and secondly, discussing how the selected measures themselves can help to achieve cost recovery for environmental and resource costs. In this way, the results of the DG Eco 2 are linked to Ecologic's previous research on the selection of measures.

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The study: "Assessing Environmental and Resource Costs in the Water Framework Directive - the Case of Germany" [pdf, 305 KB, English] was supported by the German Federal Environment Agency (UBA). It served as an extension to the project: "Cost-effective sets of measures in the Water Framework Directive", which Ecologic carried out from July 2002 to November 2003. The study is also available in a German version [pdf, 320 KB, German].

A second, related paper [pdf, 103 KB, German] discusses the case for monetary valuation studies in WFD implementation on a more general level. Eduard Interwies presented this paper at the 4th ATV-DVWK Workshop on River Basin Management in November 2003.