The application of charging schemes for the management of water pollution

This paper examines lessons from the experience in the use of charges for water resource management, considers how charges have been used in Europe, and how a new charging system could be developed. It focuses particularly on the case for pollution charges, or charges for using a river for the disposal of waste. The paper falls into four sections. The first reviews briefly the case for pollution charges, both theoretical and practical, and shows how they can complement regulatory systems. The experience of pollution charging schemes in the Netherlands, Germany and France, where charges have been used as a major mechanism for environmental and water resource management for upwards of 10 years are examined. The basis for charge schemes, their effectiveness as policy instruments and the institutional framework within which they operate are discussed. The paper addresses some questions which are central to the definition and development of charge schemes‐ the objectives, the problems and constraints. A case study is used to establish the feasibility of introducing emission charges for water resource management. How the charge could be designed and administered and how the charge level could be set is also described. Finally, some broad recommendations on the effectiveness and issues associated with charge schemes are presented.