Cost-effectiveness analysis for the implementation of the EU Water Framework Directive

The EU Water Framework Directive (WFD) prescribes cost-effectiveness analysis (CEA) as an economic tool for the minimisation of costs when formulating programmes of measures to be implemented in the European river basins by the year 2009. The WFD does not specify, however, which approach to CEA has to be taken by the EU member states. In this paper the lack of a standardised approach to CEA for the implementation of the WFD is taken as the point of departure. The aim of the paper is to discuss and evaluate two pragmatic approaches to CEA based on case studies recently performed in The Netherlands and Denmark. The case studies allow for the comparison of a quantitative and a qualitative approach to CEA at the water body and river basin level and for an evaluation of the approaches in terms of their practical applicability, their transparency and the extent to which they render sound results for decision-making. Conclusions are drawn with regard to the suitability of the two approaches for the implementation of the EU WFD.