Síntesis y comentarios finales

In its response to the Right2Water Citizen’s Initiative, the Commission identified several action points, to ensure better quality of and access to water.139 _{It recognised the need to enforce the}

implementation of the EU’s water legislation and to review existing initiatives such as the Drinking Water Directive and the Water Framework Directive. In addition, it recognised the importance of transparency and improving the information given to citizens on water quality and services.

The Commission rightly identified that in order to improve transparency and accountability of water services, benchmarking their performance and giving citizens access to comparable data on key economic and quality indicators would be beneficial. A wide range of benchmarking initiatives already exist, which compare performances of water services, including delivery and costs between companies. Benchmarking can provide operators with an incentive to improve their performance and lower their costs in order to remain competitive. However, they could also be used to guide policy making. For example, benchmarking could be used to compare data on recovery of environmental and resource costs and to evaluate to what extent these costs are recovered by the utilities. Providing citizens with transparent information on the quality of water services and using indicators on, for example, accessibility, affordability and quality of services would benefit the consumer. In the beginning it makes sense to compare and exchange best practices of benchmarking. For example, more discussion is needed on how context, like different conditions due to the age of the network or water quality affect water services and whether this can be taken into account when making comparisons. However, the aim in the medium and longer term should be to define a more structured European approach to benchmarking. This would require defining general principles, identifying a set of performance indicators in areas such as the price, and water and service quality that are usable for both operators and consumers, and providing guidance for all stakeholders involved. As the data used for benchmarking is key, efforts need to be taken to ensure this data is reliable and comparable.

139 _{European Commission (2014), Communication on the European Citizens' Initiative "Water and sanitation are a human right! Water is a}

public good, not a commodity!", COM(2014)0177 final (available at: http://eur-lex.europa.eu/legal- content/EN/TXT/?uri=celex:52014DC0177; last accessed on 23 November 2015)

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3.5 RECOMMENDATIONS

Managing water resources – new approaches needed with economic instruments 1. Enhance knowledge, monitoring and communication

 Transparency is needed on who uses and pollutes water and how much, and who is paying for it on a global and European level.

 A better understanding is needed of the price elasticity of water demand, how much different users are willing/able to pay for their water needs, to what extent the price affects demands for water and to what extent it can be used to encourage water efficiency.

 A better understanding is needed of the functioning, impacts and cost-effectiveness of different economic instruments, to achieve the Water Framework Directive objectives of full cost recovery and efficient water use. Member states and water operators should be encouraged to share experiences on implementing cost recovery and the ‘polluter pays’ principle. Indicators are needed to monitor progress.

 Along with households, industry and agricultural sectors need to be informed of the benefits of pricing schemes and cost recovery, including how they can improve water supply and quality of service. A stronger level of engagement would lead to a better alignment of interests in the long term too.

 The possibility to use analytical tools such as the Water Footprint Assessment when structuring and implementing pricing schemes should be explored further.

2. Using pricing schemes and economic instruments

 Prices must be justified and be more reflective of the real cost of using water. Pricing schemes must aim to enhance the efficient use of water resources, be fair and ensure that sufficient amounts can be recovered in order to pay for water services.

 Encouraging users, such as farmers, to be more efficient with water resources, starts with charging for the volume of water used rather than a flat-fee. Water pricing should be coupled with mandatory use of water meters.

 Using economic instruments effectively requires policy coherence and appropriate governance. For example, agriculture and energy should be aligned with the efforts to promote smarter management of water: for instance, farmers’ electricity bills should not be subsidised if it encourages them to pump more groundwater. Appropriate governance includes prohibiting illegal abstraction of water resources and ensuring the enforcement of water pollution regulations.  Implementing full cost recovery would require a clearer definition and understanding of full cost

recovery and what externalities must be internalised and how. The EU should provide guidance on how to account for environmental costs, associated negative environmental effects and for resource costs related to missed opportunities for alternative water uses.

 The ‘polluter pays’ principle must become a reality. This requires controlling pollution at the source and building a methodology that attributes costs to certain types of pollution. Because

36 externalities cannot be exactly quantified, stakeholders need to be convinced that the cost calculations are largely representative in order to bring legitimacy to pricing schemes.

 Benchmarking performance of water and sanitation services is needed, and the Commission should continue to facilitate cooperation and sharing of best practices between water operators and other stakeholders. In the long-term, the EU should define general principles, identify performance indicators, and provide guidance for stakeholders involved. The indicators should take into account the needs of consumers and consider areas such as the price, and water and service quality. The data must be reliable and comparable, and could be made available on an EU platform. As the Parliament has criticised the Commission for its weak response to the Citizens’ Initiative on water, taking action on benchmarking water services would show the commitment of the Commission to improve the quality of the water supply and sanitation services across the EU, whilst empowering citizens at the same time.

 Using funds collected through economic instruments and earmarking revenues for the water sector would provide an important source of support for maintaining and renewing the water systems as well as for innovation in the sector. However, earmarking must be used carefully to avoid inefficiency in spending.

3. Addressing equity concerns and affordability issues

 The implementation of cost recovery should not undermine the human right to safe drinking water. Everyone should have access to safe water and sanitation. Thus the costs must be shared as fairly as possible. Under no circumstances can water be unaffordable to a consumer. When needed, public authorities together with water operators must explore the possibilities of using social measures and solidarity financing solutions to assist people who cannot pay their water bills.

 The service provider needs to know how much the consumer can afford to pay, in order to use tariffs as a driver for the consumer to use less water, and in a more efficient way. Robust data and analysis would be needed to overcome this information asymmetry.

 The consumer has an important role in tackling the affordability challenge. This starts with raising awareness of a more efficient use of water, and informing consumers of what the water bill and subsidies consist of.

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INNOVATION AS A TRIGGER FOR