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Facilitating the Reform of Economic Instruments for Water Management in Georgia

image of Facilitating the Reform of Economic Instruments for Water Management in Georgia

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.

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Evaluation and ranking of options for economic instruments reform

This chapter presents the evaluation and ranking of options for economic instruments reform in Georgia. A number of criteria were used to assess the final list of options: environmental, economic, social and fiscal impacts, cost-effectiveness, political acceptability, and their administrative and practical feasibility. The chapter discussed the options which are expected to have major benefits for water management and/or the natural environment. Whether a tougher licensing and higher charges for water abstraction and pollution would have economic impacts mainly on water- and pollution-intensive undertakings or not? Would the most serious social impacts arise from increases in water and sanitation tariffs and increased irrigation fees? Could social impacts be mitigated and compensated in various ways?

English

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