 We have now 40 minutes for discussing these questions on the panel, and we will then have another 40 minutes with the audience. So we have four questions, and I think there is actually, if you remember that cock wheels, that three cock wheels that are of slightly different size, I think that very much covers actually the three areas we should cover in this session here. And the very interesting thing I realized when I saw that slide first is that the economic cock wheel is the biggest one. And I was wondering if this is then the reason that it runs at all, or if it maybe is the whole working cycle is run by the one in the lower left corner, which was, as you might remember, the target one. So that is a little bit the question we just discussed in the briefing as well. How do we solve that? From where do we go? And I think when we start with the second question, here it says, do you agree that a detailed accounting of what availability and demand taking into account ecological requirements is a precondition for allocation of what the resources being between sectors? Probably each of you then answer only yes or no. So I would like it as an open question. What are key requirements to ensure fair and sustainable allocation, sustainable allocation meaning accounting for ecosystem requirements? What do we have on stake there? What do we need in terms of knowledge base and what else? And I would like to go that way down. So I would like to start with Conchita, please. OK, of course, one of the main requirement is to know how much water we have if we want to manage it. So in that sense, the water accounting should be, I think, our top priority in any water planning process. Nobody can manage any water good if we don't know how much of that good we have and how we can use it. So this is, I think, a very important piece of work in any water planning, not in vain in many countries, such as my country, which is water scars. And this exercise has been for a long time done. The most recent milestone in this or one of the milestones in this exercise was the white paper of Waters in Spain, which was developed in the late 90s. That was a very important pillar for knowing how much water the basins can provide to the users. And there have been also other initiatives in water balances at Mediterranean basins and in other countries which have been water scars as well. So in that sense, the initiative of the commission is not new. But the innovation in this water accounting process is that the European agency is proposing to have a water accounting system based in the United Nations system of environmental economic accounting for water, which is considered a sound worldwide system, which is considered a good system. And we agree with this. So it's quite welcome, I think, for most of the water balancers community, I think. And we should encourage that process because it can help to bridge some exciting gaps in knowledge about water availability in terms of how much water is flowing in rivers, how much water is stored in the soil for several different timescales, how much water is stored in reservoirs, and how much water we can provide to users. And it can provide knowledge about how much water can really be used for different economic uses and for the environment, for the benefit of the environment and the society. So the water accounting is, in that sense, very useful in order to bridge those gaps. Nevertheless, I think that the EEA should propose a model which could be used for all the countries in a practical way according to their proper specificities in managing water, in particular regarding the scale issues. So I think that we can provide as much as many data we could have, but we have to provide them in a sort of harmonized way, in a sort that can be affordable for countries or for basins to provide them in time and with quality and also that could help to identify these gaps. So I think, in that sense, what Jack have told about the role of the CIS process is interesting, because the CIS can help to promote this process in a coordinated way between countries. So that's what I wanted to state. Thank you very much, Kanjita. I'm neutral here, so I won't say anything about EEA accounting, but I know that the colleagues are listening, so we take that. But I think that the look of things is very important. The economist, David, how do we allocate and what do we need to allocate? Oh, what do we need? OK, so I think the second question was accounting. Yes, I agree with that. And how are we going to do that? So take us given that we have a good idea of physical flows, which unfortunately we don't today, but that is definitely a precondition to doing anything. And then what I would do or what I would recommend from an economic perspective, which is a perspective that is supposed to deliver efficiency and equity or fairness, is I would recommend setting aside the environmental flows, because those are not flows that should be subject to market forces or market pricing. This is a very controversial topic, because in some countries, e-flows are zero, and in some countries, e-flows are strained, and some countries, e-flows are adequate. But again, if you put that aside and then you have remaining water, this is again because of political will to protect the environment, then you have a remainder of water, which is going to be useful for economic purposes. That water should be divided into two allocation mechanisms. One is what I traditionally call a bulk mechanism, which is something that farmers or agricultural users or would use or the amount of water that would go down a river, and then there's the way you price water in an urban setting, which reflects payment for services. At the bulk level, there are different ways of doing it. Sometimes farmers are given water. Sometimes farmers pay the cost of delivery of their water. I just found out that Cyprus gives farmers water at less than the cost. I would not recommend doing that. At the bulk level, full cost recovery is obviously an economically sustainable policy. That means you pay for the cost of capital, the cost of maintenance and operations, and the cost of additional improvements to the system. Most parts of the world do not reach this standard. And then in addition in water scarce places, the cost should reflect the price of the resource, which means that when water is abundant, I live in the Netherlands, water is abundant. The abundance resource price of water should be zero. But where water is scarce, the price of water should be higher. Of course, what we know is that in most cases of the world, and as well as in Europe, the price of water is actually lower for urban use. It's lower than not just the cost of delivery, but it's lower in the southern states where water is scarce and higher in the northern states where water is expensive because of the cost of service. That's why Copenhagen has the most expensive water in Europe. And the southern states have the most water in Europe. So from an economic perspective, we need to have that priced at a correct level, and then we're going to get efficiency. This is, I think, well understood. People that argue against that essentially say, we should be giving away a resource for less than its cost. And that's going to lead to overconsumption. And more importantly, in the case of water, it's going to lead to taking water not just out of the environment, but out of our futures. And anywhere where you have groundwater levels dropping, you'll know that there's not going to be water there for a non-rainy day when you need it. And I'll stop there for just now. Yeah. Thanks a lot. David said, I might remind, there is something that is not to be regulated by the market. Yeah? So no, you started with that statement. Flows, environmental flows are something that is outside the market. Yeah, because we don't know how to do that. Exactly. Good. Kiriakos, allocation and Cyprus? OK, we feel that the proposal of the European Commission for a uniform model of water accounts across Europe is promising. However, as already mentioned, many countries, especially water-scarce countries, already based management and allocation of water on water balances developed for each river basin already do that. For example, from the Cyprus experience, water allocation for the two main sectors, which is irrigation and domestic supply plus the environment is standard practice in order to optimize the use of available quantities of water. The basic tool for this procedure is the existence of water accounts. Of course, our system needs further improvement by employing new technology and other innovative techniques to face extreme unexpected scenarios. It is noted that to be able to produce water balances monitoring is essential. And in many water-scarce countries, this is to a great extent in place. Any improvements in the methodology will be of great help. The water accounts developed at EU level will provide the missing link for water managers to proceed to realistic allocation policies. Thank you very much. Should we continue, Werner? Would like to say something on that as well? OK. To be frank, for me, the water price we have in Germany has nothing to do with fairness also. It has only to do with cost. What costs the water to supply to the consumer and what costs it to discharge? And this price we have to pay. This is so far easy. It's, I agree, that it's much more complicated in cases where you have not enough water. And I am not politician enough to present here a solution. That's all, to that first question. OK. Thank you very much. So I think we very, very naturally move on from the allocation question. Of course, it's very closely related to how do we organize the economics around it? How do we organize the price? And how do we organize the aspects of water efficiency? And what does what measure cost? Jack, do you want to add anything on that so far? No? On the water accounts. On the water accounts, yeah? I mean, no, very briefly that what the different panelists have been saying is that what is important is that we use this EU system, not as a centralized system, but as a way of sharing all the information which is available, so ensuring that we use all what we have, which is a lot. Sometimes a lot of information is available in the basins, in the catchment, at national level, but we are not able to retrieve it in a consistent way. And then the other interest of that is, as it was said already, is to highlight the knowledge gap and link it also to monitoring. And for instance, what is a concern is the lack of information on the river flows that we have in most parts of Europe when it's an essential calibration variable for the water accounts. If we don't know the flow in the river or the level of the groundwater, we will not be able to make this accounting. And then here, I mean, it's a very important question and also is financing implication. OK, I think let's move on to the second question here on the list, the third questions, which is, formally, do you agree that the support to the end of pipe water efficiency measures should be based on a proper assessment of its cost effectiveness taking into account the rebound effect? Sounds complicated. So we are up into the third small coq wheel in the upper right corner, the other small one, next to the ecological target. And I think that is a question I would like to let Werner start with. The end of pipe water efficiency measures, how do we get them most cost-effectiveness, most cost-effective? Do we need rules? Do we need agreement? Do we need regulation on that? Or can we regulate that via price and via the allocation? OK, now we come to the end of pipe, end of the, to the product at the end of the pipeline. These I know, but here I'm a little exotic person and we have a little exotic point because before we discussed always about river management, river basin management. We discussed about then huge water demands and huge water uses. And we heard about products like power plants and so, and my products are at the end of the line and they are very small and seems to be easy to handle. But everybody of you use these products and you use the product itself and but more your use of the product depends or gives you at the end of the day or at the end of the year your bill, your yearly bill for your water coast and for your energy coast. I have to say again, additional to these products in the last 30 years, the standards for these products required a minimum delivery. As much as you deliver, as better was the product, was expected the product. Now, situation changes. The discussion about water saving, we have now since about two or three years in our standardization committees and slowly we could develop changes in the standard which allow officially products with using less water. During this time or since longer time, industry has already developed these products. So these are available. These are also available in the market and the company I work for delivers since about 10 years products which delivers less than the standard requirements and since two years we reduced these values again, especially for taps. I have here to explain when I speak here from taps, I mean especially the water basin taps, the basin taps. It makes no sense to try to save water with a tap for the bathtub filling. You must fill the bathtub, nothing else. Then you have to discuss is the bathtub bigger or should this be bigger or less? And the second product for this product for these basin mixers is this relative easy to produce it with less water consumption. It's to decide what is reasonable, how much water do you need or do you want. But and also I have to say these products are not efficient. The old was not efficient and the new are not efficient. These are on-off products. You open it and as long you open it, water flows. This has nothing to do with efficiency. You can measure efficiency for a motor energy you put in and energy goes out, but not for these products. But it's only redactional, it's the wrong word. The efficiency for these products, water efficiency. OK, basin mixers are relatively easy to reduce to a certain amount. More difficult is it with showers. If I use a shower, I will wash me. I will wash my body, my hair. When I was young, I needed a lot of water to wash my hair. Now this changed. When I look around here, now more than half of the people have a lot of hairs. They need water to wash their hairs because roughly half are women. OK, for these products, we have to consider what is good or what is useful. And it's not efficient to reduce it to a minimum value because you only need longer for your washing process and you need maybe the same amount of water than with a product which delivers a little more per minute. But I'm sure also here we can come to a compromise and we can come and there are products on the lowest end from the useful delivery and in the middle end and there are also products on the high end but the products on the very high end, you can compare with, if you compare a golf with a Porsche, you have a lot of golfs, but less Porsche, so the consumption of the Porsche or the shower which you have big overview, this doesn't give reasonable amount of water when you see it in the total. So now I have flushed the line. No? OK, good. What I will say industry can deliver products and the products are already in the market. And when we talk about these shower heads and taps and shower heads, we have also to consider these products are intended and used with, intended to use with hot water or with warm water, with heated up water and they are used for this. And so every liter of water we save is any amount of energy. It's a direct relation. It's only one factor, one mathematic factor in principle. OK, we have the products, what we need, what is the problem to introduce it in a broad way and quick introduction in the whole Europe is a problem. We are faced with a lot of different requirements in different countries. And this is one thing what hinders us, or what hinders not only us or the industry to implement it quicker. And therefore maybe you can help us by, I will say, by reducing the national obstacles. We know that they cannot do it quickly, but perhaps they can help. We need no new requirements. So in principle is all is said and all is done and we have a lot of, unfortunately, we get now more and more labels, water labels, energy labels for our products. And this doesn't really help us because all these labels or a lot of these labels are confusing. And as more we have, as more confusion we have. So when we can get rid of this and can get clarity, this would help to introduce these products, these water-saving products. And so this would improve this process. OK, thank you very much. I think that's clear. Clear guidelines, continuous, clear, continuous requirements. How does it look in the agriculture side? There we have the similar problem, I guess. Maybe you keep short. I'm trying to be short. OK, for many countries where irrigation is a main consumer, the main end of pipe water efficiency measure is the improvement of the on-farm equipment, like distillation of advanced irrigation systems, which is the farmer's responsibility. However, our experience in Cyprus shows that the initial investment costs, as well as the relevant technical advice for the installation of on-farm irrigation system, could be supported in order to give the necessary motion to the acceptance and establishment of the measure towards water use efficiency. In practice, the installation of on-farm advanced irrigation systems in some rural areas of Cyprus was funded during the 80s and 90s in a framework of a number of rural development projects supported by the UN and funded by the International Bank of Reconstruction and Development and the European Investment Bank. The result was the white acceptance of those systems and their application by all farmers over the country, while a number of advisory firms specialized in the field became gradually active in the local market. Today, all farmers in Cyprus use advanced irrigation technologies bearing the relevant full cost of installation and maintenance. These technologies are also widely used for irrigation of the recreational decorative green areas. At the same time, the installation of water meters was also funded and water meter became a standard procedure in the governmental irrigation networks as the most appropriate method for water billing. The decision for supporting the end of pie water efficiency measures should be based on a cost-effectiveness analysis taking into consideration the value of water, as an economic and environmental good. Thank you. Thank you very much. David. I want to make some comments relevant to both farmers and to showerhead manufacturers. Yeah. The law of demand and economics is probably something that you stopped listening as soon as you heard this law word. But it's something that we all experience every day. And it basically says that if something gets more expensive, we find ways of using less of it. And as an example, I like to tell people about how the price of water in Amsterdam is five times the price of water in Las Vegas, which is in the middle of the desert. And Amsterdam, remember, is in the middle of a pond of water, whereas the water consumption in Las Vegas is five times the water consumption of Amsterdam. This is a pretty good example of the law of demand. Now, what we tend to say as economists is just raise the price, and people will find a way of using less. The one way of saying that is they will find different techniques and different technologies. So they might have a showerhead that puts too much water out, but they might take a shorter shower. Or they will not flush the toilet twice because it's not manufactured for it's a low flush toilet because they would rather pay the price, for example. So as far as farmers are concerned in this so-called rebound effect and these efficiency measures, especially when it comes to farmers asking for subsidies to be incentivized to install the efficiency measures, I'll say this. It's almost universally true that farmers with more efficient irrigation systems will use all of the water that is left over from that efficiency to grow more crops. That's because farmers use water to make money. So if you want them to use less water, you should charge them more for their water, not charge them less than the cost for water. Another way of doing that, of course, which economists love, is water markets and water trading. But that might be difficult to implement immediately. As far as the showerhead manufacturing business is concerned, I have a simple recommendation, which is that we don't have regulations on high flow, low flow, the color, the shape of the showerhead. If water is expensive, people will use less water. And if they want to buy a showerhead that lets them have 100 liters a minute on their body, then they will pay that cost of that showerhead. If they want to buy a low flow showerhead, they will. And if any of you have ever gone to a campground or you have to put in a one-year-old coin for a three-minute shower, you'll know how fast you get very economical with water. Just think of that. If you go home to your shower and you have to put in one-year-old coins, every few minutes, you'll find out very quickly that expensive water will be conserved. You don't need to tell somebody what regulation, what ISO, what anything or other thing label they have to have on their showerhead or their kitchen tap or the size of their tub. So that would relieve a lot of manufacturers and a lot of consumers of burdensome regulation that does nothing at all. I think I'll stop there. Good. Candida, would you like to add on that from a Spanish perspective? Oh, well, very briefly. I think that efficiency is an issue that should be taken in everything we do, as well as underwater use. I think that the maximization of efficiency as much as possible is a good thing because it provides improvement in technology and that creates room for innovation and also induces to use less water, as well. And coming to the rebound, of course, the farmers, which I think they are more addressed by this issue, farmers will always take advantage of their incentives in efficiency because they will get more water for cropping more things. So in that sense, cropping more food. So in that sense, I think that we have to, well, I have a question to myself, which is who gains with the efficiency measures? Who is gaining with this? Who are the losers? Who are the winners? If we improve efficiency, who pays for that? And I think that we should use tools such as cost-effective assessments or multi-criteria studies in order to see how are the benefits improving efficiency in all economic sectors. OK. Thank you. I think we need to make sure this is why we are here environmentalists that the environment gains, too, not only here. And we are coming to the economic part, the third set of the third question. My colleague here, good proposal. When the price for the water and the energy, maybe, which is used to heat up the water is high enough, we don't need to regulate the products. It's a market regulated itself. That's one interim idea, maybe, the building regulation after all is not absolutely important, the ecosystem directive. The economic bit. What we see so far here from the panel that, obviously, next to the ecological flows, the ecological requirement, the market, economic, can regulate a lot. Though, obviously, right now, it doesn't do it. And we have a question here to answer, which I would then start with David to answer. What are your views on the main barriers for the implementation of fair and efficient pricing? And let's take that directly together with the last question in terms of knowledge base. Do you agree, or what other priorities that should be given to proper assessment of cost benefits of implementation or non-implementation of the water and the energy directive? So the different elements of the economics, the incentives, the pricing, but also the recovery part. David. So the answer to your question about the barriers to efficiency, in a sense, or to a good use of our resources, they're not economic. The pricing scheme as well, really, in the water framework. The barriers to pricing in the water framework directive and other types of economic use of water, those are political barriers. They're not economic barriers. I think we've known the economics for a long time. Everybody in the room probably knows the economics. In some countries or places, maybe they don't. I have a book. In some places, there is a culture of overuse. And there is a very strong problem with subsidies that encourage overuse. By the way, if you haven't figured it out, I come from the United States. And I'm very pleased that this dialogue is occurring here. And I'm a dual citizen. I'm desperate that the EU is not more bad at managing water than the United States. So you guys are neck and neck in terms of going down. That's what I want to say. The EU should do better. So in a sense, there's subsidies in the US just like there are subsidies up that distort water decisions. Whether that's a subsidy to a domestic user in Las Vegas who is taking water out of a river that does not reach the Gulf of California in Mexico. Whether it's a subsidy to a farmer in the Midwest who is growing corn for biofuels and destroying not just the groundwater but also the ecosystem. Whether it's a subsidy to an olive farmer in Spain or to a olive farmer in Greece. There are subsidies that are changing these behaviors. And I'll get to the economics of how to address that in a second. But these misallocations, of course, they're costly. And they're costly, as I mentioned earlier, to 98% of the people who may not be paying attention. And the 2% of people who are paying attention who are receiving those subsidies really like getting those subsidies. So the politics is the problem of the majority essentially finding a way to get their money back from the minority. The problem as well as cash transfers is that, and I think this is quite an interesting problem, is that many areas where they are over abstracting water are not even of interest to the EU. Those are, from a subsidiarity perspective, those people are making their own trouble for themselves in the future. And often I think there's three solutions. One is they actually hope that they're going to be bailed out by somebody bringing them more water in the future. That happens when you have large canals or transit systems bringing water from one system to another. We see that in most countries in the world. Or they intend to retire before their children go into the business. Or they actually don't even pay attention to the future because they are really pressed right now. And that's a possibility. But unfortunately, most people who are going to suffer from misuse of water are going to be people who live in the areas that are water stressed. And also let me point out that this is not just about water quantity. I live in the Netherlands, which I notice has a record number of exemptions from water quality regulations. I think their domestic farm lobby is constantly not at the table having a discussion. I've mentioned this, I think, to the Prince of Orange who nods his head and walks away. So unfortunately, these problems occur at different levels in every place. So those are the politics. And how would I resolve it? I mentioned earlier about using pricing for domestic water and markets or any kind of pricing change for farmers depending on how they get their water. I would also think I would add my word or to this idea of cross linkage. Is that the word for it? Between the common agricultural policy funds, I, of course, think that no cap money should be dispersed to any area which is not actually reporting their water use, nor any area which is under water stress. That money, I don't think the money should go back to the other areas, that money could be used for technical experts who will then bring those areas up to compliance, which means that all the local consultants will still get paid and the countries cannot complain they're not getting their share of the cap money. I'll stop there for now. Thanks. Kiryakos, on the economics, what are barriers for implementation and cost benefits? The barriers. First of all, let me say that access to good quality water is a basic human right, fundamental for survival and human health. Through the centuries, water was considered to be a blessing from God, a gift from nature. Thus, even today, people believe that water should be provided to all at no cost or at a very low cost. This is the first barrier. Second, because what is necessary for every social and economic activity, water management is often a matter of policy decision. In most countries, pricing policies need the necessary political will for implementation. That is very important. Thirdly, price elasticity of demand for water is very low in some countries, especially water scarce regions, where water quantities available are limited anyway. There is no room for considerable further water saving. Even if you increase the price, there is no more saving. Therefore, elasticity is zero or close to zero, and pricing cannot act as a barrier to consumption any further. The fourth barrier, pricing should be applied together with other relevant, sorry, other related demand management measures in order to give the right signal to consumers. For example, metering and volumetric pricing and people's education and awareness to accept water as a social as well as an economic good. Pricing policies should make the people use water efficiently. Thus, the goal of pricing should be to make the users introduce water efficient technologies and practices as already discussed. However, a more comprehensive approach is needed from the governments in order to make these alternatives available, accessible, and affordable. And lastly, on the issue of knowledge base, the assessment of the cost and benefits of the non-implementation of the water framework directive is very interesting. It's a very interesting issue, and it should be investigated further. The knowledge base, therefore, needs to be enhanced and further research is needed at EU level. Thank you. OK. Thank you very much. I would like to go soon now into the discussion with the audience. Very shortly, would you like to add something on that economic side? I mean, it's obviously how much I was thinking about the elasticity of demand. There is, of course, something I can do with efficiency technology, because it moves. This is the elasticity of demand. Yeah, OK. By sure, improvement moves always. But on the level we have now, we can deliver all what is needed. And what we need from EU, please, hear carefully. We don't require funding, and we don't require funding for development and inventions. This we can do ourselves. We need stable framework, stable political framework, and stable requirements. Best, same in all member states. This would help enough. Clear message. David, really? Audience, turn. Very, very quickly, yeah. Because Kiriaka said two things that were interesting. He said, talk about the human right to water, and that water should be free. And we got used to water being free. And as some people have noticed, when you go to a city and the parking places become more and more expensive, because there's not very many parking places, or there's fixed amount of parking places and more and more cars. And we've got the same problem with water in many places. Water should be free when it's abundant. If you go to Netherlands, you can have as much water as you want. When you go to Greece, you're probably going to have to pay for your water. The other thing I wanted to mention that's quite important is that if there is no room for saving. So you actually said price doesn't have an effect, and then you said price has an effect, but it depends. So if there is no room for saving, then some places are going to have to reduce their agricultural sector. And I looked up earlier, because the minister from Cyprus talked about water use, I looked at a paper from some two scholars from the Cyprus University of Technology in Greece, 83% of the water used for agriculture. Cyprus, 69% agriculture. Desalination, remember. 68% in Spain, 57% in Italy, and 52% in Portugal. And those sectors are going to shrink if there is no elastic. For example, there will be fewer farmers, or there will be more farmers on less land, more importantly. And that is a fact. Unless, of course, the city people want to evacuate and go live in Berlin or something. OK. With that, I go to the audience. Maybe you have some reactions on that, please. There is, yes, a lady in the third row? My name is. Say your name, please, and your attitude. My name is Natasha Mosse from the International Office for Water. But on this particular discussion, I think I'm more going to react as a citizen than more than my office in the name of my office. I have to admit, I'm a bit scared when I hear what you've said that with the money, we can regulate everything. And that is true from an economic point of view that the money, the price, is going to have an influence on the action of people. But we also know from an economic point of view when we have efficiency, it doesn't mean at all we have equity. So how do you take into account the fair aspect in your first question? I can really understand the economic point of view, but I've, you know, so that would be my question addressed to the panel. You are collecting some questions. Here was in the second row, please. Thank you. Certain care from the Danish Ministry of Environment being the permanent secretary, deputy. To congratulate you with this very important discussion. And I guess we could put it that way, it would be considered extremely important that the water protection and water use are approached in an integrated policy. So, and I think that we have a particular interest in water pricing as a road to improve protection and efficient use of water resources at the same time. It's a big job, as also the discussion up there indicates. We need to plan for water use, we need to measure water use or at least estimate the water use and then build a system to put a value to water and then create incentives to use the resource as efficiently as possible. Pricing of water should then change the consumer's behavior and attract companies and creative persons to develop water saving technologies. And the efficient use of resources and development of better methodologies and technologies are central elements in the transition to a green economy. And I think it's very important that we have this overall perspective ahead of us because equal to energy, water is a very important raw material to production of goods and services. So, water policies for quality and availability and efficient use would prove to be important to the overall societal goals for the green economy, contributing to growth and the creation of new jobs. So, that's an important part of it as well, thank you. Okay, thank you very much. I take one more question. The lady over there in the middle, yeah? Thank you. My name is Claree Papazog Lou Birdlife Cypress and Environmental NGO. I'd like to support very much what Dr. Zedland has said about pricing. I think another thing I would say for the Cypress context, especially, is that by increasing the price, the responsible authorities can also have more money to tackle some of the other problems, which is, for example, a very important problem that was not mentioned, the more than 50,000 illegal wells operating in Cypress at the moment where farmers are getting actually water for free, not even paying a small amount, as well as the environmental costs, which at the moment are not being tackled and things like restoration of wetlands which can help for flooding and all sorts of other issues and biodiversity, of course. And by increasing the price, it makes water that is available from recycling much more attractive because the prices start to become much more similar. Whereas if you compare free with a little bit expensive, of course, the free is always better. And also it can push diversification of crops or even changing of crops because if some crops are no longer sustainable, then that change has to happen. It's better if it happens sooner than later. But I have a question also for Dr. Zetland. Clearly, the countries in the North are paying much, much higher prices for water, but from what we've seen also from the presentation, from the commission in the beginning, they still have a lot of problems for implementing the water directive. So certainly water pricing is not the answer, it's not the silver bullet, let's say, it's not the answer to everything. So what else has to be done? If it's directly to that, I should be first go to the panel. Okay. So I think there were a bunch of questions I heard about being scared of the economics and but a positive way. David, you probably first answer. I have four answers to four questions. So let me start with the equity efficiency question. The first thing is that most people's taps, your costs on the order of, let's say, one to three euros per thousand liters, right? Those bottles in front of you cost about one euro per liter. So in fact, the cost of water-tier tap is not going to make you die of thirst in many cases. If you're very concerned about this question, there's different ways of implementing pricing schemes. There are increasing block rates so that there is a, for example, 50 liters per person per day is cheap and then you pay more if you have an estate and a garden and a pool. So there's ways of structuring these tariffs with full cost recovery to indeed increase the incentive to conserve the water. I don't necessarily recommend using what the so-called social price is to deliver justice. I recommend using the taxation system to deliver justice so that poor people get income transfers and then they can use that for water or for petrol or for cigarettes or whatever they feel like. Secondly, I wanted to point out, I forgot to mention that rain-fed agriculture is not an evil idea. It is not as profitable as irrigated agriculture, but humans subsisted for thousands of years with rain-fed agriculture and some parts of the world, some parts of the Mediterranean will probably return to that style of irrigation. On the jobs, someone said something about jobs or they didn't but I just heard it in my head. But I want to point out that if you have subsidies going towards the preferred sector, whether it's the agricultural sector or it's the, I don't know, the computer sector, whatever, if you have subsidies going to that sector and the subsidy is actually in the form of cheap water, then you're taking water away from other sectors that could be also producing jobs, right? So it's not that you're saving jobs in the agricultural sector, you're taking away jobs and sectors that could use that water for better purposes. On illegal wells, this is an extremely good point. As we heard already, I think Spain has 10 times as many wells that are illegal. It is a good way to use those fees and so on from streamlined paperwork. Those fees should be used for enforcement of the laws. But of course, you have corruption and bribery and I'm a development economist and a water economist so I know how that works and I'll leave that to you. There was, in the question of problems in the North in terms of the charts that we saw earlier and the high water prices, remember those high water prices tend to be with regard to tap water and most of the problems in the North are with regard to water quality, which are usually from agricultural runoff and though in that sense, I believe Denmark has, for example, a fertilizer tax or a pesticide tax, they got rid of their fat tax, I heard, right? So if you have taxes on these products, people will use less of them but most of the water quality problems in the North are caused by agricultural users discharging contaminated tail water. Anybody else wants to answer on that first question? Yeah, could you ask, please? I wanna make some comments about the question raised by Mrs. Babayosov-Lew. What I wanna say is that the price of water for domestic needs covers the full cost of this one but the price of water for the irrigation sector doesn't. One very important thing I want to stress is that if we do increase in a country like Cyprus the price of water for irrigation, we are gonna drive lots of farmers out of their jobs, they are going to abandon the land and this is basically a social issue. We have to be very careful with that. And also on the issue of the environmental cost, let me first make a comment about the illegal boreholes in Cyprus. Yes, we have lots of illegal boreholes who have a very big problem. It is extremely difficult to tackle this issue but let me say that the cost of water out of these illegal boreholes is much higher than the cost of water from the government projects. When the bill that relates to article nine of the water framework directive is passed, people are gonna pay for the environmental cost and the resource cost as well. That's it, thank you. Good, thank you. Fritz, first. I find this discussion extremely important and I would join the comments made by my Danish colleague. But my feeling is if I follow the discussion and listen to the so-called solutions, I call it the so-called solutions, then my feeling is that if we are not able to produce other solutions, now we endowed the issue of market pricing in the water field. And we are discussing this issue in a way I would call so all in one device suitable for every purpose. And I think we have to be really careful what we can do through water pricing and what we cannot do through water pricing. And to be clear, domestic use is peanuts if you like to ensure more water availability. This is 2%, 4%, it's below 5%, it depends. And it is clear if you like to change something, then you have to go primarily for agriculture and secondly for industry. But if you go for industry, you can really see, especially within the industry, especially within the European Union, that in the last 20 years, the water-intensive industry developed a lot of technical solutions to avoid being charged for water consumption. So I think we have to discuss this issue, but we have to be careful what was said for a household. The price elasticity is close to zero if you are in a specific situation. This applies also for parts of agriculture. And what we didn't discuss in the last panel, I would like to raise here. If we are not able, especially in the arid and semi-arid areas of the European Union, to come to a kind of regulation in the water field, then there is no need to save domestic water because domestic will be the far end of a long chain. Which is, at the end, not having enough water. If you go around in parts of these areas, then it's clear that in the domestic field, you cannot really earn amounts of water they are available for other purposes. And this is the only point. If we are discussing economics, let us discuss economics in fields where economics are efficient, but not in fields where economics is senseless. Thank you very much. One more question to add to that, that maybe gives them to. Yeah, a comment and an observation and then a question at the end. I'm Hugh Goldsmith, I'm head of water at the European Investment Bank. So we look at water projects all over Europe and we usually do an economic and financial analysis of them. What you learn is that all over Europe there's a huge, huge diversity of approaches to pricing and the pricing is essentially historic and the change in pricing is hugely political. So where you want to go to and how you're going to change things is a political process. And what we haven't heard so far in this afternoon session is going back to what was said in a previous session about the three T's. The three T's was a framework for trying to be transparent about what's being recovered through prices, what's being recovered through taxes and what's being subsidized from some external source. So one of the ideas of the Water Framework Directive, as I understood it, was that there was supposed to be an economic analysis at a river basin level. And the river basin level, you have to look at intersectoral allocation of water. And a three T's framework would give you some transparency and clarity at least what the decisions that are being taken now about pricing and about efficient allocation are. So what I'd like to ask the panel, perhaps the gentleman from the commission, is you've done this analysis of all the river basin plans across Europe. We've heard about the bad performers who haven't even submitted plans yet. We've seen the red points on the map. We've seen the grays of no data. And so it seems that there's quite a lot of failure of whoever it is who's supposed to be preparing the river basin management plans. But the other thing I was supposed to do was do an economic analysis. So what are the good cases you've got to tell us about how good economic analysis is being used to achieve the objectives of the Framework Directive, which are good ecological status of waters? Thanks. I would like to take these two contributions and go back to the panel and start with Jacques. Is that okay? No, thanks. I think it's a very good question because if you remember the presentation, I mean when speaking about pricing, the first word I used and I insisted on is transparency and what we have so far in the reports, in the river basin management plans. So what has been reported to the commission is a very weak level of economic analysis in particular when it relates to the quantitative aspect of water management. So this is why now we want to launch this work on building water accounts and at the same level and at the same time gather information from different river basins where we have seen that these water accounts were built so there are good examples in France, in Spain for instance of this. We are also developing with the GRC, it is a hydro-economic model which is a partial way but it's at least a way of having this integrated perspective that gentlemen from the Danish Ministry was referring before. I mean we need this framework to understand how the water is used by the different sectors so far the information is very bad on what is for instance on the share of the water which is abstracted which is actually consumed. I mean this is, we are dealing with a lot of ratios taking from here and there and which do not correspond to the reality so we need a much better understanding of that and here again we have good examples of sectoral models. I mean we are working together for instance with Euroelectric in order to improve this database in the energy sector. So this will be, I mean with this process we want to arrive at a situation in three years times where this economic analysis is put at the place it deserves in the next river basin management plan because so far it's almost absent. Okay and who else, David? Yeah, briefly on the second question and I'll go back to Fritz's excellent question. I think that, and I'm not speaking about the basin plans but I think that what economists would keep track here is of the opportunity costs of misallocation and we know, I have many many examples I can tell you of these opportunity costs in terms of political rhetoric and massive subsidies for the wrong kinds of technology and so on and then you can look at other places where water markets for example are more active and you see farmers who are switching from lower value or lower profit crops to higher profit maximizing the benefit of the scarce amount of water. So when we see the water allocation working we see some good results where we see the lack of water allocation we see many bad results but that again is not speaking at all for these reports but I would be very interested in reading what you're asking for. Regarding Fritz's comment, of course I totally agree. I'm a political economist and maybe I skated too quickly over the political side of water allocation, right? So I initially said e-flows will be reserved in a political process outside of the economic process and that's with respect to as I mentioned before bulk water. Then you can have, for example, some kind of agricultural allocation of water whether and this is the thing that I think most people miss is that subsidies keep not just bad businesses in place whether it's a car manufacturer or any other kind of business but subsidies keep bad farmers in business, right? And if the subsidies go away or if there were a market for reallocation of water among farmers, right, so it's not going to the cities it's just one farmer to another then the good farmers would stay in business. The good farmers would continue to grow European food so you don't have to buy food from the foreigners and then the water would be used in a sustainable way. That's an economic side. On the political side, the human right to water, for example, or social water tariffs which I don't agree with but if you want to make sure that poor people, there are no, technically by the way, nobody in the EU is too poor to afford water at the tariffs right now, by the way. Go to Africa if you want to talk about poverty but if you even still want to make sure that poor people can afford water then you would do an income tax transfer. A political process will result in an income tax transfer, a negative income tax. On the other hand, full cost recovery is super important for water services and if you want your water utility to be in business in 20 or 30 years, you make sure they can recover their costs. I also want to respond to the farmers who are being given subsidized water because what would happen if we don't have those farmers? Well, what happened to the steel workers and what happened to the car workers? Bad news, they went out of business because they could not be subsidized to stay in business. Those manufacturers went out of business and some farmers are going to be peripheral and they should not be farming anymore. Some of the land that was not farmed in the most recent 10 years, potentially due to cap subsidies will go back to being fallow land or rain-fed land, as I mentioned before. That's my comment about politics and economics. We still have some more time for more questions for this. Oh yeah, there was the lady here. Yes, I'm Terza Morghra from the Council of European Municipalities and Regions. We discussed also this subject and I want to stress one point, well, two points. From the Municipalities and Regions point of view, it's not possible to have an open market on water pricing because it's a public responsibility and the knowledge of how to address water will be lost with the public as administration and this will give a lot of problems if it will go wrong with the, well, markets. The second point I want to stress is there cannot be any kind of level playing field. Well, the blueprint promotes that as well so nothing one side in any subject mentioned in the blueprint. There is no one size fits all but we are a little bit concerned if this is also the case in all the guidances and methodologies that will be stressed. So how will the Commission well support this also in the guidances? Is that a similar? You have there, I have a... Someone similar is going to respond to several things. If you want to take that question first. First, please answer to your direct question. I mean, making a guidance for the implementation of the water framework directive, I don't think that it means a one size fits all solution. I mean, it's exactly the opposite. I mean, what we want is to ensure that we all understand the same thing from the water directive and its implementation and therefore that the difference in the situation can be taken into account. And it is where, I mean, in the CIS, I mean, we have, I mean, obviously all the members that represented and all the sectors and the NGOs and other institutions in order to avoid what we were just referring to. Yeah, just a quick response. I mean, in urban water services, it's the farthest thing in the planet from a market, right? It's highly regulated. Whether it's run by a municipal water company or an investor owned water utility, they're always, always, always regulated. I'm not talking about shooting all the regulators and letting the monopolist go for it. You know, this is a regulated place. And I would say the regulators should target full cost recovery so that they have a system in 50 years. Okay, I think the last question before we round up in the back there. Just going to deal with a few issues and communication and regulation are some of them, but I'll start out with the communication times. When you're talking about water as an essential human right, you can say, yes, water could be considered an essential human right, but you can also say you have to pay for the delivery of that water in a certain quality. So that's one form of communicating the problem with water and the need for pricing of water. Pricing also needs metering and monitoring, obviously. We've discussed that before. You can't do good pricing unless you have metering or monitoring. You have to know how much people are buying and selling. So that's another important consideration. And that has to be established in many places. It hasn't been established, obviously, in many of the basins that we've been discussing where the problems are. Often price alone is not enough to stimulate change quickly enough. And this we can see in many different areas. The higher prices of energy didn't really stimulate the efficient appliances of energy and not energy saving light bulbs, for instance. It had to be regulated in many places of the world that had to say, okay, now you have to switch over to energy saving light bulbs. Also, especially things that are very expensive at the beginning, but pay off in the long run, people often don't think about those prices. The same is for water saving appliances. The city of Boston in 10 years have the demand for water resources. And it was able to avoid building new water supply system. They did that not just by water pricing, although that was one mechanism, but they started with regulation. They started by saying, well, all new buildings have to have water saving appliances installed. And they use pricing mechanisms as well and leakage detection. So there is a number of mechanisms, but water pricing alone wasn't enough to kickstart the process. And I think we have to keep that in mind when you're setting policy for the EU too. Okay, thank you very much for all these contributions in the audience. I would like to go round through the panelists now. Your very short kind of summary messages you want to round up here. Starviz Kanchita. Well, summary messages is my view that we can put a better value to water if we know how much water it's available and how much water is used. And all the methodologies we can use for knowing these are values. We can implement a methodology based on how much water is metered, how much water is not metered, or how much water is available from modeling. I think there is a variety of technologies and we have to use the most appropriate technologies in order to have the knowledge on this. And I would like to support the last comment on water pricing because the energy pricing is very important in the water supply. Efficiency implies energy consumption and energy has all surprise. So it's been a fact in Spain that farmers have to pay much more for the water because the prices of the electricity have increased a lot. So this should be taken into account when talking about efficiency. Again, on the last point, I think prices are fantastic, but I think that the thing to do, of course, is that prices and regulations should work together. Again, going back to Las Vegas, they have this fantastically low price and then they pay you to not use the water. So this is not a good idea. You should send a signal, which is complementary to regulations, if you feel like it. Again, a non-price mechanism was in Brisbane and Australia in the middle of a drought. Everybody read in the newspaper there's a drought. You should use less water. They immediately started using less water. Demand dropped by 50%. The price of water barely changed. So if you have social cohesion in your country, then you can make those kinds of announcements. In some places where social cohesion is weaker, you might need to use pricing, but in fact, all of these different mechanisms should reinforce each other. My summary comment or a summary of how we should manage water, you should measure it so we know what we're doing. You should keep within the sustainable volumes. Again, setting aside e-flows and then the user should pay the full cost of their water. 30 seconds. Water management needs an integrated approach taking into account availability of water, efficiency, cost-effectiveness and economics. There is, of course, further room for improvement for end-of-pipe water efficiency measures, especially with the use of advanced irrigation systems. Effective pricing needs to be analyzed further, taking into consideration the local conditions and the very low elasticity that exists in water scarce countries. Thank you. Okay. Thank you very much. Your last word, Anna. In the industry, I belong to, can contribute to water-saving. This is clear. What we need are a stable framework. What we need, excuse me. What we need is a stable framework and not overloaded requirements with overloaded, I mean overloaded with details which are not helpful and especially overloaded with bureaucratic burdens. Then we can help the commission without asking additional fundings. So that's all. Yes. I mean, we have not actually spoken a lot about cost and benefit analysis. I mean, I think it's, and you will see in the blueprint, it's something on which we want to pay a lot of attention over the coming years. I mean, first, because this is a way of understanding the degree of cost recovery. I mean, comparing the level of the price that are paid, I mean, it's, of course, it's interesting, but it's not what we should aim at. I mean, we should understand, I mean, what are the costs of the water and the price we pay so that we understand that what is this degree of cost recovery, then this degree of cost recovery, it's not only an economic question. It's also a political question, but we need, I mean, to put all the data on the table. But it's not only for that that we should do cost and benefit analysis. We need also a better understanding and a wider understanding of the water use. I mean, water is also a competitiveness factor for a lot of sectors. I mean, for agriculture, for industry, for energy. And this is also something on which we need to improve our knowledge. And I think it's also something important for the years to come. Yeah. Okay, thank you very much. From my side, to try to summarize that, I would like to go back to the pictures of the cockwheel. Remembering the economic cockwheel was the biggest one. And it is obviously a very important and big one. We need a lot of discussion about it. We spent quite some time on the discussion on that. But it is not necessarily the one that runs it all because we need to have the target, the e-flow, the political process as a very important tool to drive the whole machinery. And then there is a part we can leave to the economy. And the efficiency, obviously, we heard can be driven by price and it needs a stable framework. I think that's a very clear message we got. And on the political side of the economies, we obviously need a lot of more discussion, maybe not only guidance, but communication and understanding and say streamlining, but common understanding between member states and the intense discussion process on how we tackle it on a European level between member states to have a common working framework on that. I think that's what we can give you for the blueprint from that session. And thank you very much. I hope we are in time looking to, I have closing the session, the practical announcement. People should bring their badges to access the venue on the second day. So please don't forget your badges tomorrow. And we will now have a transfer to the hotels by bus and from the hotel to Famagusta gate for the evening reception. You stay in your hotel probably 10 minutes or something like that, so I don't know. Okay, session is closed, thank you very much. Have a nice evening.