Is the cost benefit analysis alone, relevant to conclude on disproportionate costs? The example of the evaluation of of PoMs in the Sèvre Nantaise river basin

What is expected from the case study? Giving an example of prospective POM for a pilot river basin, implementing a cost benefit analysis (2002) : What kind of answers (PoM) can we give to pressure and associated impacts? Feasibility of the economic approach what are the costs of appropriate measures? what are the associated benefits? Can we conclude on disproportionate costs? Lessons

Specificity of the Sevre Nantaise basin : many and different uses and activities context of a dialogue process between stakeholders (local masterplan with involvement of local actors via a local commitee A study has been done in 2002 : need to be updated in the light of initial status objectives defined in 2004 for the entire basin and at the light of article 5 report scenarios presented here are the ones of the study : really choices of stakeholders for the basin master plan could be different

network (physical chemical and biological) Characterisation of the basin Activities and uses Existing monitoring network (physical chemical and biological) 290 000 inhabitants Drinking water : 10.6 Mm3/year (3 dams) Agriculture : livestock / wine / corn Irrigation : 12 Mm3 per year Industry : 96 main industries Fishing (22000), boats, tourism Main issues point source pollution non point source pollution scarcity of water Three scenarios have been set up

Scenario 1 : the baseline scenario Basic ambition level concerning the quality and quantity of water resources For the most part, basic measures defined to meet the requirements of sectorial directives (drinking water, urban waste-water, nitrates) This scenario presents risks of not completely achieving the good water status for the entire river basin (efficiency problems) potential gap from good water status?

Annual cost (millions €) Scenario 1 : the baseline scenario Measures Annual cost (millions €) Depollution in livestock farms 5.08 Protection of water catchment 0.17 Urban waste water treatment 0.508 Improvement of the flow 0.32 Total cost of scenario 1 6.078

Scenario 2 : enhancing the chance to reach the GES Doing better than the basic level concerning the quality and quantity of water resources On top of scenario 1, supplementary measures focused mainly on preventive drinking water protection (upstream of water catchment) This scenario should allow to reduce the risk of not achieving the objective of good water status in time

Annual cost (millions €) Scenario 2 : enhancing the chance to reach the GES Measures Annual cost (millions €) scenario 1 + 6.078 Protected zones (upstream of water catchment) 1.311 Grass belts (upstream) 0.762 Treatment of phosphorus and nitrates for small units (upstream) 0.178 Total cost of scenario 2 8.331

Scenario 3 : a sustainable development scenario? Maximal ambition level concerning the quality and quantity of water resources On top of scenario 1, supplementary measures defined to : apply agricultural best practice to the entire surface basin optimize protection to catchment area exceed the urban waste water directive requirements improve the morphology of the rivers This scenario should allow to achieve the good water status within the time limit of 2015 Disproportionate costs?

Annual cost (millions €) Scenario 3 : a sustainable development scenario Measures Annual cost (millions €) Scenario 1 + 6.078 Treatment of bateriological pollution 4.337 Grass belts 1.677 Extension of protected zones 4.162 Remediation of river banks and beds 0.873 Total scenario 3 17.13

The cost benefit analysis Measures Annual cost (millions €) Scenario 1 6.078 Scenario 2 8.331 Scenario 3 17.13 Annual benefit (millions €) 0.5 2 23 drinking water treatment costs avoided (of scenario 1 and 2), + development of fishing and tourism (with assessment of non marketable profits)

The benefits of scenario 3 The benefits of scenario 3 may seems important 23 million euros, it means about 21 additional millions compared scenario 2 The additional 21 million euros of benefits are for 90% due to a forecast potential development of tourism If we have less optimistic trends for the tourism the benefits could be about 10 million euros In this case the CBA of scenario 3 will largely be negative about 12 millions compared to the 17 millions of costs.

The CBA results for this RB The three scenario of PoM have been analysed through a CBA The 2 first scenario have a negative CBA The third scenario « sustainable development » has a positive CBA for optimistic hypothesis for tourism The benefits calculated for the third scenario remains uncertain the hypothesis is an increase of about 20% of the tourism which would have an important impact on the local economy

CBA results for this RB The CBA remains an uncertain exercise largely influenced by the hypothesis In terms of tourism, it was difficult to imagine how much benefits an improvement of the water quality will generate benefits (turnover) For water bodies where there is no important touristic potential, the CBA remains often negative, doesn’t it means that there is nothing to do and just ask for derogation? At the end, the CBA doesn’t reveal if the 290 000 inhabitants, the farmers, and the industrialists of the RB will be able to pay the major part (art 9 cost recovery) of scenario 3 costs and if yes when (2015? , 2021? ,2027?,…)

Some lessons from the RB CBA is an interesting tool to be used in the decision making process CBA needs to combine a cost effeciency analysis of the possible alternative programmes of measures CBA remains an uncertain exercise (hypothesis) CBA will reveal often negative at places where there is not a possible important touristic development (for ground water WB it could be an important problem) CBA alone doesn’t allow to conclude on disproportionate costs To judge on disproportionate costs it is important to cross the CBA with an analysis of the social impacts (affordability) of the PoM.