1. Selecting cost effective abatement measures to achieve good water status with the environmental costing model S. Broekx 1, E. Meynaerts 1, P. Vercaemst 1, S. Ochelen 2, K. Van Hoof 3 1 Flemish Institute for Technological Research (VITO), Boeretang 200, B-2400 Mol, Belgium, tel +32 14 33 59 59, steven.broekx@vito.be 2 Flemish Environment Administration (LNE), Koning Albert II laan 20 bus 8, B-1000 Brussel, Belgium, tel +32 2 553 81 44, sara.ochelen@lin.vlaanderen.be 3 Flemish Environment Agency (VMM), A. Van de Maelestraat 96, B-9320 Erembodegem, Belgium, tel +32 53 72 66 93, k.vanhoof@vmm.be 1 INTRODUCTION In Flanders, the Environmental Costing Model (Milieukostenmodel or MKM in Dutch) provides useful economic insights to assist policy-makers in designing a cost- effective programme of measures to achieve a good water state as stipulated in the European Water Framework Directive. The BAT-Centre of the Flemish Institute for Technological Research (VITO) started in June 2001, under the authority of AMINAL, with the development of the Environmental Costing Model. The Flemish Government aspires with this project the development of a tool to (i) determine the costs of environmental policy and (ii) contribute to a more efficient environmental policy by indicating how environmental targets can be realised at the lowest possible cost. Initially, the model is developed for the most important industrial air pollution sources in Flanders. By analogy with atmospheric pollution, the BAT-Centre started with a test case for ‘pollution of surface water’ which focuses on the pollutants P, N, COD, the Nete basin and multiple emission sources (industry, households, agriculture). 2 ROLE OF COST EFFECTIVENESS ANALYSIS WITHIN THE WATER FRAMEWORK DIRECTIVE The European Water Framework Directive (WFD) requires member states to implement the necessary measures to ensure a good ecological and chemical status of surface and groundwater by 2015. To achieve this, member states must carry out a number of steps. A cost effectiveness analysis (CEA) has to be applied to determine the combination of measures to be applied in the programme of measures. Calculating the cost and the effectiveness of measures is also essential to assess whether or not costs can be considered disproportionate and to justify potential derogations. 3 METHODOLOGY By means of linear programming the MKM determines the least cost combination of abatement measures to satisfy multi-pollutant reduction targets. Reduction targets are determined by comparing VLAREM II standards with actual measurements in the reference period and this for each water body. Targets are compared with different possibilities to achieve them. Results are least cost combinations, but can also be a ranking in cost- effectiveness of measures which can be useful for priority setting. 4 CASE STUDY: NETE BASIN The Nete is a tributary of the Scheldt river. The basin is part of the Flanders Region in Belgium. It has a surface of 1.673 km² and a total length of watercourses of 2.224 km. Approximately 600.000 inhabitants live in the basin and 4.121 companies are situated inside the region. Targets in the case study are set for each VHA-zone (Flemish hydrographic zones). This subdivision is applied as the subdivision in water bodies was not known at the beginning of this study and data on emissions are available on this level. As the division into water bodies is less detailed than VHA-zones, this is not an issue for further development. 5 FIRST RESULTS First results show that approximately 60 million € or 100 € per inhabitant per year is needed annually to achieve the standards in the Nete basin and this for the pollutants COD, Ntot and Ptot. The majority of these annual costs result from the connection of households to collective waste water treatment plants and setting nitrate targets for agriculture more stringent. Extension of the model with the remaining basins in Flanders is foreseen in 2007 and the first half of 2008. Improvement of the methodology is focused on improving data on households and agriculture and establishing a link between the MKM and the water quality model PEGASE, which is used by the Flemish Environment Agency for the Scheldt basin. Source:WATECO Guidance Document No. 1 VHA - zones Sector Total annual cost% Reduction k€%CODNtotPtot Agriculture diffuse emissions 16.83829%0%29%37% Agriculture point emissions 1.7683%10%0%3% Industry large9.77917%21%15%17% Industry small4.0587%5%2%1% Households26.34945%64%54%41% Total58.792100%