Cost-effectiveness analysis in the implementation of the Water Framework Directive: A comparative analysis of the United Kingdom and Spain

One of the most innovative aspects of the European Water Framework Directive (WFD) is the incorporation of economic principles and tools into water management and water policy. Amongst the various economic analyses stated or implied in the WFD, the cost-effectiveness analysis (CEA) of mitigation measures needed to achieve the ‘good ecological status’ has been given a pivotal place. This is aimed at establishing the least costly combination of measures to be included in the so-called Programme of Measures (PoMs) of the river basin management plans. In this paper, first, we review and discuss the existing CEA methods related to WFD implementation. Second, we assess the progress made so far in the application of CEA and its limitations in two European countries: the United Kingdom and Spain. The overall aim is to assess the CEA approaches pursued, the achievements made, and the major challenges to-date in the design and implementation of WFD-related CEA studies to guiding water management and water-related policy decisions in these countries. Our results show that the two countries show different levels of experiences and progress in relation to undertaking WFD related-CEA. The key differences among the two countries relate not only to the nature of the main problems they face in their respective water environment, but also to the approaches in the estimation of costs and effectiveness and the up-to-date progresses in the implementation of the WFD. Major similarities among the two are: i) their primary focus on pressures (rather than on impact) when measuring effectiveness and ii) the importance of the agricultural sector in affecting and being affected by the WFD.