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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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Overview of economic instruments for water management in Georgia

This chapter presents the purpose of economic instruments for water resources management and describes the main types of economic instruments, i.e. user charges, abstraction and pollution taxes, subsidies and penalties. The chapter also describes four broad principles used to justify the use of economic instruments for water management. The chapter discusses the current status of economic instruments in Georgia. At present, the country applies four categories of economic instruments for managing its water resources: fees for water abstraction, user charges for water supply and sanitation, irrigation water supply tariffs and fines for non-compliance with regulations concerning water resources. The chapter also discusses water pollution charges which were introduced in 1993 and then abolished in 2005.

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