CLIMATE CHANGE – WATER SECTOR
HIGH-LEVEL CONFERENCE ON WATER, CLIMATE AND HEALTH
First International Forum on Development, Environment and Health
Arezzo, Italy, November 20-23, 2012
Roberto Zocchi – Chair EU3
EUREAU – WHO WE ARE
EUREAU is the European Federation of
National Associations of Water and
Wastewater Services. EUREAU gather
10.000 water & waste water utilities &
operators across Europe that provide
sustainable water services to around
405 million European citizens.
VISION
EUREAU aims for a provision of reliable
and high quality water supply and waste
water services which:
• Protect public health;
• Fully respect the natural environment;
• Support economic development;
• Socially acceptable
Climate change
Climate change stress the water sector
operational activity but mostly……the
infrastructural need
FINANCING ISSUE!
Application of the 3Ts Framework:
Action plan and way forward,
beyond Marseille
Roberto Zocchi
EU3 Chair
13 March 2012, Marseille
3Ts Framework
Developed by OECD –
applied by EUREAU,
The 3Ts (Tariffs Taxes
Transfers) framework
represents a powerful
tool in unlocking our
understanding of the
sources of the funds
which underpin a
sustainable future
WATER AGENCY
SANITATION OPERATOR
WATER SUPPLY OPERATOR
BULK WATER OPERATOR
LOCAL GOVERNMENT
SEWER OPERATORS
3Ts Framework
TAXES/Transf
Tariff
(Cap.Ex.)
(Op.Ex.
Cap.Ex.)
Tariff
(Op.Ex.)
Time…..
TAXES/Transf.
3Ts concept into practice in order to promote:
− A source contribution increasing transparency of the financing of
water services and to facilitate the reporting obligations on the costs
recovery principle (article 9 of European Water Framework Directive)
− A useful diagnosis and decision-making tool
− A means of informing on water services related investment targets
− A tool to raise general awareness of sectorial financing issues
An appropriate mix of Tariffs, Taxes and Transfers:
to finance capital and recurrent costs in the long run, and
leverage other forms of finance (equity, loans, bonds)
Tariff policies that :
are affordable to all users, including the poorest
ensure the financial sustainability of service providers
provide appropriate incentives (consumption, efficiency)
Subsidy policies that :
are predictable and reliable to facilitate investment planning
meet social and environmental objectives
are affordable to national/local governments
(message: if the local government or the public authorities want to make water services affordable
for the poorest, the funds could be targeted to this specific population through social mechanisms,
with financial resources not coming from water)
Sustainable Future - Recommendations (1)
Relying on public funds or donors aids on a permanent basis is
not consistent with the principle of sustainability of water
services, and price policies and tariff structures have to
incorporate a return on capital, consistent with the principle of
“full cost recovery”, to cover the financing needs of the sector.
Tariff structures should also ideally reflect the long-term fixed
nature of investment.
Rising efficiency
• Effective regulation
• Economic leverage
Sustainable Future - Recommendations (2)
maintenance holiday is an expensive short term thinking!
ARE WE PROPERLY MANTAINIG WATER SERVICES ASSETS
FOR THE FUTURE GENERATIONS?
Water Inflow
479,8 Mm3/yr
Distribution Network
5.482 km
Mains
878 km
Aqueducts
208 km
Storage Tanks Capacity
480.388 m3
Piezometers
n. 6
……
…
ASSET RENEWAL (extimated value)
15 – 20 Billion Euros
PLANNED GLOBAL INVESTMENT (5 Yrs):
100/150 M€/Year
Rising Standards (ww new infrastructures):
50/100 M€/Year
Maintenance (Ord/Extra; w/ww):
45/50 M€/Year
(0,25%!.....400 Years!)
NOT ENOUGTH!! WE HAVE TO DO MORE!!
WETAXES/Transf
ARE LEAVING PROBLEMS TO NEXT GENERATIONS!
Tariff
(Op.Ex.
Cap.Ex.)
(Cap.Ex.)
Tariff
(Op.Ex.)
Time…..
TAXES/Transf.