1. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen Summary and draft conclusions 11 April 2008

2. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 2 General remarks There were many interesting presentations. There seems to be a variety of approaches in Member States, e.g. For pre-screening and for assessing the benefits. - The discussions were more about exchanging information, than about moving towards a common approach.

3. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 3 General approaches There were case studies on prioritisation and pre-screening for applying the exemptions. Such prioritisation approaches have the merit of simplicity Is not clear how these approaches will work out in justifying exemptions on water body scale in line with the Directive. It was clear from most case studies that the more information/different elements you have, the better it is to inform decision-making. Keep it proportionate

4. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 4 Affordability In most presented cases, affordability was one element for making the decision on an extension of the deadline. There were some cases were the cost-benefit ratio was clearly positive, and affordability was said to play a decisive role in deciding on an extension of the deadline. There was no case studies presented where affordability played a role in lowering the objectives, although UK indicated in the discussions that there might be examples. There were cases where affordability issues were overcome by alternative financing mechanisms. There was a Fr case study on 2030 -> to reach good status There was a case study on combining measures at a later stage having higher benefits – not clear how this relates to affordability, because it would become clear in comparing costs and benefits at different time scales (cf SE case study). Recognise ES case studies

5. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 5 Alternative financing mechanisms There were no case studies presented where there were no alternative financing mechanisms one could think of. It was indicated by some countries that they will face limits of the public budget at different levels. Mention constraints from European Legislation It is not clear how to scale down such budget constraints to justify exemptions for particular waterbodies. It was indicated in some MS that changes of the institutional framework, e.g. for setting alternative financing mechanisms would need time so the deadline needs to be extended. It is not clear how this relates to justifying the exemptions in line with the Directive.

6. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 6 Cost of non-action/lost benefits & comparing costs-benefits There were case studies where costs of non-action were integrated in the analysis. It was generally agreed that these costs should be considered when affordability might be used as an argument for extension the deadline. Different evaluation techniques, incl Willingness to pay was used as a method related to benefits in ES, FR and DK case studies. DE presented a methodology…. Benefits assessments vs cba Uncertainty – relates to margin costs/benefits

7. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 7 Recovery of costs It was mentioned that the definition of water services is important in applying the polluter pays principle and finding financial alternatives but there were no case studies on this topic. Other links with Article 9 have been discussed when looking into alternative financing alternatives: alternative taxes, social/economic effects. Article 9 does allow for looking into alternative fian

8. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 8 Costs It was presented that identifying the marginal benefits is a useful element in the economic analysis, but it was mentioned that it is no basis for decision-making on achieving good status as the WFD is about achieving the environmental objectives. Marginal costs and benefits could provide useful information on setting lower objectives.

9. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 9 Conclusions - alternative financing A proportionate combination of the different analyses (cost-benefit, benefits assessment, distribution of costs, social and secoral impacts, affordability, cost-effectiveness, etc) are useful to inform decision making. When affordability arguments can be used to extend the deadline, it has to be demonstrated that there are no relevant alternative financing mechanisms available. Alternative financing mechanisms include for instance distribution of costs among polluters and beneficiaries (users), use of the public budget (different levels) including direct payments, European funds, etc. In case there are no alternative financing mechanisms identified and the deadline will be extended, it needs to be indicated what steps will be taken to address the issue.

10. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 10 Conclusions - affordability Based on the polluter-pays principle, the use of affordability in extending the deadlines should not bring as a consequence that certain actors and sectors will not contribute to achieving good status in subsequent planning cycles. For the same reason, affordability issues in a certain sector or for a certain user can not be used as a reason for setting less stringent objectives. NL: It might be that affordability issues can not be resolved without getting to disproportionate costs, leading to the necessity to set an alternative objective. FR: example on achieving objective in 2030 in stead of 2027 SE: example where distributional consequences can not be taken into account in 4.5 Affordability could be the final decisive (COM disagrees) argument to look into when deciding on an extension of the deadline, but needs to be substantiated by further investigations. An assessments of benefits of the measures needs to play a role in deciding on an extension of the deadline.

11. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 11 Conclusions - links to Article 9 A narrow interpretation of water services may affect the range of actors that can be relied upon for financing measures (NL, BE, DE, UK, LU, eurelectric disagree with putting a statement on this in the paper). This doesn’t mean that Article 9 doesn’t allow for recovery of costs of certain water users.

12. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 12 Conclusions - public budget As the WFD sets environmental objectives and the budget should follow. Certain Member States indicated that there will be public budget constraints. It was presented how the constraints in the public budget can be scaled down to the waterbody level through prioritisation.

13. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen 13 Conclusions - general Although the elements of the analysis are in common, it is likely that comparability of applying exemptions will be complex with the current variety in the application of the different approaches for the first cycle. From the case studies presented it is not clear if the use of affordability arguments will influence the ambition of implementation. From the case studies presented it is not clear how the assessment of benefits will influence the ambition of implementation. There were case studies presented that showed that is possible to be transparent in decision-making on exemptions, also for exemptions related to affordability. Draft river basin management plans should be used to present in a transparent way the measures needed to achieve good status together with overall constraints, in order to make this information subject to public debate through the public participation process. Sufficient level of detail on how total costs and benefits and other elements have been assessed should be given.