Proceedings of the 10 th International Conference on Environmental Science and Technology Kos island, Greece, 5 – 7 September 2007 A-196 DESIGNING WATER PRICING IN THE CONTEXT OF WFD IMPLEMENTATION: A CASE STUDY IN THE RIVER BASIN OF ANTHEMOUNTAS, GREECE G.Z. CHALVATZI, E. MANOLI and D. ASSIMACOPOULOS School of Chemical Engineering, National Technical University of Athens Heroon Polytechneiou 9, Zografou Campus, GR-15780, Athens, Greece. e-mail: assim@chemeng.ntua.gr EXTENDED ABSTRACT The implementation of Article 9 of the Water Framework Directive (WFD) requires Member States to ensure by 2010 that water pricing policies provide adequate incentives to users for efficient water usage and that water uses have an adequate contribution to the costs of water services. Furthermore, the objective of active stakeholder and public participation on water management operations necessitates the establishment of a transparent framework on the water service sector, ensuring access to background information, including financial data, which would enable democratic control over water service costs and charges and facilitate the implementation and possibly the public acceptance of pricing reforms. This paper outlines a methodological approach for the formulation of pricing policies that would contribute to the objectives of the WFD through the implementation of a “consolidated cost- accounting system” which considers all costs associated with water resource management and the way that these are financed. Furthermore, it presents a case study on the formulation of pricing schemes that can address the objectives of transparency, equitable allocation of costs, cost recovery and incentive pricing, also taking also into account social criteria, such as affordability of water charges and equity among consumers. The approach, which was applied in the River Basin of Anthemountas in Northern Greece, includes two steps: current cost accounting and pricing policies are evaluated against the pre-defined criteria in order to identify the deficiencies of the current system; different pricing schemes are subsequently developed and ranked on the basis of their performance against the set-out objectives. Results from the assessment, which was undertaken within the framework of the LIFE Water Agenda Project, “Development and implementation of IWRM policy to a river basin, through the application of a social wide local agreement, based on the principles of Agenda 21 and the provisions of the Water Framework Directive 2000/60/ΕC”, were presented during the public consultation process currently under implementation in the region. The initiated dialogue indicated that there is acknowledgement of the need for reforms in the water pricing system; emphasis was given in clarifying the concepts of the “polluter-pays” principle and of environmental and resource cost recovery as disincentives for preventing degradation of water bodies. Keywords: Water pricing, Water Framework Directive, Cost Recovery, Polluter-Pays Principle, Transparency, Public consultation. 1 INTRODUCTION Several researchers argue that the outward manifestations of water problems, such as water shortage, intersectoral competition over scarce resources, pollution and environmental degradation are not solely linked to physical or technical water