Facilitating the Reform of Economic Instruments for Water Management in Georgia

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This study assesses the use of economic instruments for water resources management in Georgia and considers options for reform following the 2014 signature of an Association Agreement with the EU committing to alignment with the EU’s Water Framework Directive. This includes the systematic use of economic instruments, including water pricing, to recover the cost of water services provided to households, industry and farmers, among other measures.

Three main economic instruments are recommended in this study: 1) the introduction of a licensing regime and charges for both surface water and groundwater abstraction, 2) the restoration of a licencing and charging regime for all forms of water pollution, and 3) more rigorous enforcement of these measures, including more active monitoring and higher fines for offenders. Implementing these measures will be greatly facilitated by the enactment of the new Water Law now being examined by the government of Georgia.



Costs of water resource management in Armenia and South Africa

Armenia offers a natural comparator for Georgia. Its population is c. 3 mln (Georgia’s 4.3 mln), its area 30 000 sq.km. (Georgia 11 000 sq km) and GDP per head in PPP terms USD 7 780 (Georgia USD 7 160) (The Economist, 2015). 1 In addition, the climate, relief and other key geographical and environmental features of the two countries are not dissimilar (ADB, 2016).


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