Decision - Making in the European Water Framework Directive : the Potential Consequences of a Neoclassical Approach

The paper focuses on the decision-making process in the EU Water Framework Directive (WFD). The WFD is an important piece of legislation, which will decide the quality of the EU aquatic environment for the foreseeable future. The main environmental goal of the Directive is good ecological status, to be achieved by 2015. The paper highlights the central role disproportionate cost analysis (DCA), the process by which member states can substantiate applications for derogation and less stringent environmental objectives, will play in determining the eventual quality of the EU aquatic environment. The paper draws attention to a potential development path, which the DCA process could take, based on an important guidance document on economics in the WFD (WATECO) and the AquaMoney project, a large neoclassical project established to produce guidelines for member states as to how to conduct DCA, essentially based on economic valuation methodologies, specifically contingent valuation and benefit transfer. The paper is critical of this potential approach based on a theoretical discussion, which concludes that deliberative approaches to decision-making appear to be more appropriate as they better fit the nature of environmental problems. The second part of the paper is an analysis of the decision-making process in the WFD. The WFD both introduces economic methodologies and public participation for river basin management. The paper concludes that the use of neoclassical methods, such as contingent valuation, for DCA and the need in the WFD for public participation, represented by active involvement, are mutually exclusive and that the level of public participation advocated by the WATECO guidance document and the AquaMoney project fails to involve stakeholders actively in the decision-making process. The second conclusion is that the use of neoclassical methods for decision-making, such as CV and benefit transfer, will have consequences for the European aquatic environment in that it will result in the limited effectiveness of the Directive and the adoption of less stringent environmental objectives. Finally, the paper proposes an alternative decision-making process for the WFD based on a model of stakeholder participation.