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.



Options for economic instruments for water management in Georgia

This chapter analyses the options for reform of existing and introduction of new economic instruments for water management in Georgia. The analysis is organised according to whether the economic instruments are justified by the User Pays, Polluter Pays, Beneficiary Pays Principles, or as the creation of Pro-Environmental Incentives. The chapter discusses transboundary water issues which have major impacts on the political and economic relations between Georgia and its neighbouring states, specifically Azerbaijan and Armenia. This is due to their upstream/downstream geographical status, and their sharing of river basins and water bodies with common problems. Using economic instruments for water management in a transboundary context has specific challenges, additional to those arising in the national realm.


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