Financing public water management: dealing with economic costs of water use

Today, many scientists and policy makers underline the importance of internalizing all social and economic costs in charges and prices for water use. Ideally, all service and environmental costs should be recovered in conformity with “polluter pays” and “user pays” principles, using the water system (or river basin) approach to detect these costs. Attempts in The Netherlands to implement these principles however, show that it is not always easy to deduct just charges and prices from hydrological cause-effect relations. Such charges and prices do not always provide adequate signals to users and polluters. The institutional framework and the social, economic and political context determine where and how these financing principles can be implemented. The focus should therefore shift from “blind” charges on pollution and abstraction to (self-)imposed efforts made to measure.