Financing

Costs incurred by an activity at the expense of another activity, of an environment, etc, and uncompensated or not supported by those who generate them. Under the Water Framework Directive 2000/60/EC, we are interested in external environmental costs of services related to water use and more generally water-related activities (withdrawals, discharges, developments, etc); e.g. the costs of exploration and exploitation of new resources due to the pollution of previously exploited groundwater are actually and ultimately supported by the subscribers to drinking water supply services on the price per cubic metre. One of the great practices of environmental economy is to reintegrate externalities into market exchange, externalities are internalized. In other words, environmental degradation (pollution, overexploitation, etc) is included into the prices that otherwise is ignored.

Total cost of water, including environmental cost, the cost of the resource and the cost of service.

Aggregation of the utilization values and non-utilization values of a good or a service.

Tax levied by the State to control pollution or the overexploitation of water resources. In the case of pollution, the environmental tax consists in imposing to the polluter a tax per unit of pollutant discharged (which is equal to the marginal cost of pollution abatement). A tax is economically more efficient than a standard because the effort to reduce pollution is naturally distributed at low cost.

Policy to condition water use to the payment of a price. The Water Framework Directive 2000/60/EC calls on Member States to ensure that by 2010 pricing policies encourage users to use water efficiently to avoid wastage.

Issue related to the valuation of a good/property in a contingent valuation, which can be considered in different ways. The first of them corresponds to a system of increasing or decreasing successive bids. Example: we propose an amount to the individual and, according to his response (acceptance or rejection), we propose a second amount (higher or lower), then a third amount, and so on. The criticisms made to this mechanism are for the most part linked to the fact that responses are highly dependent on the first offer.

Difference between the willingness to pay the maximum price to acquire a property and the price of this property.

According to this principle, the water users bear as much as possible the costs incurred by their water uses: investment, operating and depreciation costs, environmental costs, and even, if possible, the cost of the resource. This principle is called "cost recovery". On this principle, the Water Framework Directive 2000/60/EC sets two targets for Member States: by late 2004, the assessment should include the current level of recovery, distinguishing at least three economic sectors (industry, agriculture and households); by 2010, the taking into account of this principle, particularly through water pricing. The Directive requires transparency in the financing of water policy, but it does not set an obligation to full cost recovery on uses.

Principle established in the Environmental Code, whereby the costs arising from measures to prevent, reduce and control environmental pollution must be borne by the polluter.

Market of tradable permits that entitle a stakeholder (company, individual, etc) to discharge pollutants or withdraw a resource. The State sets a target of environmental quality and distributes or allocates the corresponding number of rights. These rights can then be bought and sold between stakeholders, a polluter cannot discharge more pollutants than its permits allow.