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Institutional and economic instruments for sustainable water management in the Mediterranean region

Final Report Summary - INECO (Institutional and economic instruments for sustainable water management in the Mediterranean region)

Water availability in Mediterranean is unquestionably limited, due to low rate of natural renewal of surface and groundwater supplies, unwise water allocation and use and increasing pollution loads that are discharged to water bodies. A supply oriented, centralised approach was therefore implemented, entailing the development of large scale projects to meet irrigation and potable water needs. However, it also became evident that the increase of socioeconomic development and the preservation of food security, of self-sufficiency and of a healthy water environment cannot rely solely on the augmentation of water supply. As a result, integrated holistic water resources' management schemes were promoted and further motivated through the implementation of European directives.

In this context, the INECO coordination action aimed to promote capacity building towards constructively engaged integrated water resources management. A network of research institutes, public authorities and stakeholders in Mediterranean countries was developed and strengthened, focussing on alternative economic and institutional instruments that would promote sustainable management. The proposed innovations were evaluated using seven representative case studies that outlined emerging policy needs. The specific project objectives were to:

1. promote the widest possible dissemination and exchange of information in the water sector
2. analyse, in a consistent and comprehensive manner, governance structures and water allocation mechanisms in the participating regions
3. develop exemplary regional analyses of the efficiency and effectiveness of the applied economic instruments, taking into account social objectives
5. formulate guidelines, adapted to specific regional needs, for the application of the promoted alternatives.

The project methodology comprised of four distinct phases, each grouping several work packages and individual tasks. The first project phase, titled 'horizontal activities', spanned the entire project duration and focussed on coordination and management tasks. Moreover, a common background and institutional assessment methodology was established during the second project phase through extensive literature review and field work. Relevant activities were conducted by five work packages (WPs), which included the selection of case studies and the proposal of performance indicators, as well as the organisation of stakeholder workshops which enforced INECO dissemination. Furthermore, a typology on institutional frameworks was developed during this stage.

The third phase of INECO included the analysis of institutional and economic instruments, which could contribute to the mitigation of issues at hand, with an emphasis on effectiveness and equity. The evaluated techniques were either already applied in the areas of interest or appeared as promising alternatives to conventional management practices. This phase resulted in the proposal of sets of management options that were suitable for the different case studies and were promoted during a stakeholder assembly workshop.

The final phase of the project addressed the synthesis of the obtained results to formulate regional policy recommendations and produce final outputs. The latter were disseminated beyond the consortium and the individual stakeholders that participated in the process. The proposed tools, which were accessible via an internet page, focussed on:

1. cost sharing and recovery for water service provision and infrastructure development
2. institutional framework and acceptability of environmental taxation
3. incentives for water saving, including subsidies provided for the adoption of environmentally friendly practices and the incentive function of water tariffs
4. compensation in case that specific uses should be phased out as they could not be sustained due to environmental or socioeconomic reasons
5. public participation and stakeholder involvement
6. regulation of abstraction and discharges.

Finally, an international conference for the promotion of INECO conclusions was organised in order to maximise the project impact.