In implementing the Water Framework Directive, cost-effectiveness analysis (CEA) is an essential part of choosing between options from the Programme of Measures. Ecologic contributed the European expertise in a project commissioned by The UK Department for Environment, Food and Rural Affairs (DEFRA) to assess what type of data were available for CEA. An analysis of the German, Dutch, Austrian and French approaches was carried out and conclusions drawn about their transferability.

The Water Framework Directive (WFD) particularly stresses the economic aspects of water management and how cost-effective analysis (CEA) can be used to assess relative benefits or disadvantages of potential measures to achieve environmental objectives. As a compulsory part of WFD implementation, CEA will have to be carried out across Britain by the various agencies involved in water management, often by staff with no expertise in economics. This project is part of a collaborative research programme run by DEFRA which focus on the development of approaches and data required to assess the costs and benefits of the Programmes of Measures (POMs) with the idea of providing guidance for those carrying out CEA. Project 2b aims to develop a methodology to assess the costs and economic impacts even-handedly for the main types of measures required under the WFD. This involved characterising the measures, consulting with stakeholders, data and literature review, workshops and pilot studies.

Ecologic was part of a consortium of consultants who carried out Task 4, one of ten tasks with the specific purpose of investigating the extent to which cost data are readily available in the different sectors which may be required to implement measures. The idea is to use this information alongside the methodology developed in the other tasks of project 2b to help with the assessment of the cost-effectiveness of measures.

Ecologic concentrated on approaches used in the EC covering a variety of sectors which are likely to be affected by WFD implementation. To do this, Ecologic reviewed the German Handbook on Selecting Cost-Effective Sets of Measures  developed by Ecologic for the German Federal Environment Agency, as well as work undertaken in the Netherlands, France and Austria. Expertise on economic instruments applied to water management and the POMs in general was also contributed. It was found that information on the financial costs of measures was generally available but that other types of information for example on environmental costs might be more difficult to access.

The final report also highlighted the risks of transferring data between Member States.

Download final report:
0 - Executive summary [pdf, 258 KB, English]
A - Introduction [pdf, 312 KB, English]
B - Costs [pdf, 543 KB, English]
C - Effectiveness [pdf, 418 KB, English]
D - Cost-effectiveness analysis [pdf, 152 KB, English]