Full cost recovery in the urban residential sector according to the Water Framework Directive

Abstract

Full cost recovery is a major and complex issue that has gained high recognition in recent years. The Water Framework Directive promotes the idea that water charging should act as an incentive for the sustainable use of water resources. Thus, all Member States should take into consideration the principle of recovery of the total cost of water services, which includes environmental and resource costs as well. In order to evaluate various aspects of current water policy, to investigate the perspectives of water saving, to explore new approaches toward sustainable water management in the water supply sector and to evaluate water price elasticity, a survey has been performed recently in the city of Volos, concerning the residential sector. The influence of some selected variables is examined, residential water demand curve and water price elasticity are calculated. Estimations of future water demand under different pricing policies are also performed. Finally, the full water cost for the city of Volos is estimated and essential conclusions concerning water pricing and public participation are drawn.