The economics of water scarcity
This paper examines the current status of water availability, water demand, and influences
from climate change in the European Union. It provides an overview of economic policy
instruments to address water scarcity and manage water demand. Additionally, the paper
explores policy options and considerations for addressing water scarcity and meeting
Water Framework Directive (WFD) objectives. These considerations include balancing
demand management and supply augmentation, managing water scarcity through robust
allocation regimes, and increasing the use of agro-environmental measures and practices.
The paper also discusses the principles and features of effective allocation regimes,
drivers and incentives for allocation reforms, the hierarchy and sequencing of water
use, abstraction charges, ensuring return flows and ecological flows, and improving
the coherence of WFD measures and climate change policies. This is the third in a
sub-set of four working papers within the Environment Working Paper series destined
to support the further implementation of the economic pillar of the Water Framework
Directive. The four papers are best read in combination and provide lessons which
are relevant beyond the European Union.
Published on May 24, 2024
In series:OECD Environment Working Papersview more titles