The Water Framework Directive in Greece. Estimating the Environmental and Resource Cost in the Water Districts of Western and Central Macedonia: Methods, Results and Proposals for Water Pricing

The EU, understanding the need for sustainable management of water resources, established a framework for community action in the field of water policy under the Water Framework Directive (2000/60/EC). Results reveal that an essential condition for sustainable water management is the understanding of its true value. Correct pricing of water helps to improve services for water distribution and also contributes to its preservation. Therefore, the aim of this paper is the presentation of the methods of calculating the environmental and resource cost, their application in a particular study area (Water Districts of Central and Western Macedonia, Greece) and the conclusions following from the estimations. After extensive literature review it was found that there is not a perfectly acceptable method of calculating the environmental and resource cost of water. What is more, the pricing of water use is necessary because water use requires actions having a direct economic cost, as well as ‘external’ costs to society such as the environmental and resource cost. Prices in a “justified” pricing model should reflect the recovery of full cost aiming at maximizing social welfare, preventing the exploitation of resources and securing access to water to the socially vulnerable members of society.