European attitudes to water pricing: Internalizing environmental and resource costs

- Efficient water resource use requires internalization of all costs in the price.
- None of the EU member states fully internalize environmental and resource costs.
- Attitudes towards environmental water pricing is spatially clustered within the EU.
- Information has a positive effect on public attitude to environmental water pricing.
- Affordability concern alone is not a barrier to environmental water pricing.

Efficient use of the water resource requires internalization of all costs in the price of water, including environmental and resource costs. However, water resource management tends to be highly political and increasing water prices are a sensitive and complicated policy matter. Hence, there is a need for increased understanding of the implementation process and the attitudes towards implementation among the general public. This paper explores the spatial heterogeneity in the public attitude towards internalizing environmental and resource costs in the price of water across the EU regions. Within an extensive spatial dataset constructed for the purpose, we estimate the effect of individual information levels and affordability concerns on the attitude towards environmental water pricing. Information about water problems is found to have a significant and positive effect on attitudes as is affordability concern, which may be explained by expectations of inequity measures to come in place in parallel with increasing water prices. Overall these results support the hypothesis that lack of information and affordability concern could lead to resistance towards efficient water pricing among the general public.