The European Policy on Water Use at the Urban Level in the Context of the Water Framework Directive. Effectiveness, Appropriateness and Efficiency

The current European policy on water resources use in cities is undergoing radical reform in an attempt to confront the water quality problems and the dramatically intensified water scarcity. Among the most elaborate documents concerning current water policy is the Water Framework Directive (WFD), which spells out the targets of water policy at the European level. The confrontation of water scarcity, deterioration in quality, and the reduction in costs of the water supply industry emerge as decisive principles of the new European policy on water use in cities. These targets are currently assimilated in the agendas of national water policies in almost all European countries. To achieve these objectives several policy instruments have been applied in Europe. The more prevailing instruments are: demand management, privatization of water companies and efficient/full cost pricing of water use. The present article aims at systematically evaluating the effectiveness and efficiency of the current water policy for urban systems, by examining the coherence of its instruments as well as their appropriateness for achieving the policy's targets. To start with, the paper presents an elementary economic analysis of the current water policy. The effects of the most common policy instruments are systematically traced in the framework of economic analysis. Next, three indicative case cities are presented and examined. As it turns out, however, the results of the implementation of the main instruments are contradictory. This drastically reduces the effectiveness of the water policy. We indicate that these contradictory effects are inherent in the water policy and originate in the lack of appropriate social processes and institutions for the management of natural resources.