Pricing instruments for water management and services

This chapter presents Adherents’ experience with pricing instruments for water management and services, in line with the OECD Recommendation on Water. The chapter explores how Adherents set abstractions charges that reflect water scarcity water pollution charges to incentivise pollution prevention as well as tariffs that cover operation, maintenance and renewal costs of service provision. It highlights examples of pricing instruments accounting for the redistributive consequences and priority water uses. It also explores efforts to phase out price-distorting policy measures and general subsidies. Finally, the chapter reports valuable efforts to reduce transaction costs when designing pricing instruments.