The Water Framework Directive: stakeholder preferences and catchment management strategies--are they reconcilable?

The key objective of the European Water Framework Directive (WFD) is to promote sustainable water use by protecting water resources. Here, we investigate how the economic consequences of a set of water management regulations is received by a group of stakeholders in the Rönneå catchment. We explore three themes from an economic point of view: i) perceived causes of eutrophication, ii) preferences regarding water use, and iii) the extent to which the polluter-pays principle should be applied. There is a common understanding about the intentions in the WFD to enhance cost-effective water use. All stakeholder groups largely share a similar picture of the causes of water quality deterioration. However, there is not one cost-effective and fair solution. Several mixes of remedial measures within the same catchment are possible, depending on the scale of action. Despite potential economic gains from cooperation between sectors, the participants regard the individual polluter-pays principle as the most feasible mode of funding for remedial programs, supported by subsidies. There is little demand for more market institutions (emission fees, tradable emission permits). The stakeholders have a conservative view of water management, i.e. they accept the present combination of regulations and economic incentives, and they are fully aware of the complexity of the issue. In general, the WFD recommendations for the calculation of cost-effective abatement strategies seem to imply an underestimation of the value of external effects in the decision-making process.