Title: Evaluating Economic Policy Instruments for Sustainable Water Management in Europe

Duration: 2011 - 2013


Evaluation of effectiveness of economic instruments in integrated water policy (EPI-Water)
Economic policy instruments (EPI) have received widespread attention over the last three decades, and have increasingly been implemented to achieve environmental policy objectives. However, whereas EPI have been successfully applied in some policy domains (such as climate, energy and air quality), their application to tackle water management issues (drought/water scarcity, floods, water quality control) is beset by many practical difficulties.


  • Using a common multi-dimensional assessment framework, to compare the performance of single economic instruments with alternative policy instruments and baseline scenarios. In particular:
    • To analyse the extent to which economic instruments contribute to achieving water policy goals (e.g. good ecological status of water bodies, flood protection, reducing risk and uncertainty in water availability), either directly (via changing use/consumption behaviour) or indirectly (via raising financial resources for implementing water policy protection measures);
    • To analyse the efficiency implications of economic instruments, that is to what extent they contribute to an optimal allocation and use of water resources (or goods and services provided by aquatic ecosystems) also in situations in which not all use- and non-use values are known or fully accounted for.
  • Identifying the preconditions for economic instruments (or group of instruments) to be implementable, effective and/or efficient in given socio-economic, hydrological, cultural and institutional conditions of Europe, be it in isolation or in combination with command and control mechanisms.

Identifying remaining research and methodological issues that need to be addressed, in particular with regards to the further development and use of national accounting, for supporting the design, implementation and evaluation of EPI in the field of water management.


This project has received funding from the European Union’s FP7 Programme under Grant Agreement no. 265213.