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Impact assessment of the newly prepared/adopted legislation in the field of Water Supply and Sewerage on household income

Solution period: 04/01/2016 - 09/30/2016
Contract authority: Ernst & Young, s.r.o.
Contact: Jan Macháč (machac@ireas.cz)

How much does a household pay for improving the environment? The basic question that needs to be raised when modifying water related legislation. Based on cost projections into the water and sewer costs, the social acceptability of proposed changes was determined.

The aim of the study was to comprehensively evaluate the social impacts of each proposal to change the water and sewerage legislation, which are based primarily on the requirements of the EU Water Framework Directive (Directive of the European Parliament and of the Council No. 2000/60/EC). The new legislation proposals include changes in the permissible values and fees for surface/groundwater consumption, definition of emission limits in wastewater and restricted utilization of WWTP sludge on farmland. Planned changes in the law would affect the price of water and thus the final consumers – households. The study focused on analysing the impact of the legislative changes on the lowest-income households, while taking regional disparities into account (household income, water and sewer charges). The analysis also included the size of the municipality, the catchment area to which it belongs in the case of surface water abstraction, the current status of WWTPs and other variables which vary by the region. Overall, impacts for more than 50 municipalities in all the regions of the Czech Republic were modelled. A detailed model based on the current status and the water and sewer charges was created for each city. Subsequently, individual partial amendments to the legislation were introduced into the model, which led to the calculation of additional costs and thus the increase in the water and sewer costs.

Conclusions of the project:

By carrying out the analysis it was found that adoption of the planned legislation would have an impact on an increase in the share of water and sewer expenditures in lowest-income households falling in the first decile (with income up to CZK 6,000 per person) from an average of 4.09% by 2015 to 4.56% in 2023 after adoption of all the planned and forthcoming legislative changes. For households with incomes between CZK 6,000 and 8,000, this ratio would increase from the original 2.81% to 3.42%. The envisaged changes would result in household budgets being burdened on average by 0.4–0.5% of total revenues. The analysis further showed that the most significant effect on the increase in water and sewer costs would be the setting of emission limits for wastewater discharges, where a number of currently used sewage treatment plants would have to undergo extensive refurbishment to technologically achieve the level required by law.

Outputs:

MACHÁČ, Jan, ZAŇKOVÁ, Lenka (2017). How much extra will households pay for environmental improvement? Impacts of water and sewerage legislation in preparation on incomes of the poorest households in the South Bohemian Region In MATĚJOVÁ, Lenka (ed.). Proceedings of the 21st International Conference Current Trends in Public Sector Research 2017. Brno: Masaryk University, 2017. pp. 305-312. ISSN 2336-1239. ISBN 978-80-210-8448-3.  (download pdf)

Research team: Jan Macháč, Lenka Zaňková (Zemková)