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In order to conduct the economic analysis according to the EU-Water Framework Directive by the 2004-deadline, the relevant content of the Directive had to be interpreted and made practicable. Ecologic analysed the relevant requirements for the German Environment Ministry, provided relevant input to the European WATECO-process and prepared a first draft of a guidance document for the practical implementation of the economic analysis in Germany.

According to the Water Framework Directive (WFD), EU member states are obliged to conduct an economic analysis of water use for every river basin by the year 2004. This analysis will support the introduction of the cost recovery principle into water management, including considerations on environmental and resource costs. In addition, the economic analysis is intended to provide information in support of selecting cost-effective sets of measures for reaching the environmental targets of the WFD.

So far experiences with such analyses are rare in Germany as well as in other EU member states, and no detailed guidelines about the basic approach and methods to be used for the realisation of the economic analyses are given in the Directive. The objective of this project was to clarify and take forward the implementation of the economic analysis, taking into consideration the current situation and requirements in Germany. Based on an analysis and interpretation of the relevant regulations of the Directive, Ecologic developed a draft guidance document on the various requirements for implementation of the economic analysis in Germany. This development took place in close cooperation with the European Commission, the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Safety (BMU), the German Federal Environmental Agency (UBA) and the Working Group of the Federal States on Water Problems in Germany (LAWA). The first draft of this guidance was discussed with during a workshop with the interested public in June 2001.

These guidelines enabled the water authorities in Germany to carry out pilot implementation projects of the economic analysis in selected cases. Based on these experiences, the proposed approach for the implementation of the economic analysis in Germany was further specified.