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.



Recommendations for economic instruments for water management in Georgia

This chapter presents the key recommendations of the study and a shortlist of economic instruments identified following the assessment of the various options. The chapter describes the priorities in implementation of economic instruments reform and timetable. The draft Water Law is central to implementation of economic instruments for water management, hence top priority should go to completing its passage through parliament, leading to its eventual enactment. While this is on the critical path, a number of other actions need to be carried out in preparation for use of the economic instruments, each with its own timetable and duration, and involving different institutions and players. It also discusses some measures for serious further study and possible piloting within a longer time horizon, e.g. payments for ecosystem services, sharing costs and benefits in transboundary basins.


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