Economic Requirements and Instruments for Sustainable Urban Water Management – Comparative Review

  • Erik GawelEmail author
  • Norman Bedtke
Part of the Future City book series (FUCI, volume 12)


Sustainable water management is still one of the major challenges of our times, and economic instruments may significantly contribute to a transition towards sustainability in water management. This chapter provides an overview on the current state of the implementation of sustainable water management in Germany. After introducing environmental policy instruments with a special focus on water pricing, the chapter gives an overview of topical challenges in Germany by looking in particular at the design of key policy instruments and the related need for reforms. The following points will be taken into consideration: contradictory requirements of water pricing, deficiencies of current tariffs against the background of changing demand structures, the role of environmental regulatory charges and the importance of a pending urban water sector transition. It will be shown that Germany’s water management is far from being completely “sustainable” – despite all the successes achieved to date.


  1. ATT, BDEW, DBVW, DVGW, DWA, VKU (2015) Profile of the German Water Sector 2015. Accessed 17 Apr 2018
  2. Baptista JM (2014) The regulation of water and waste services: an integrated approach. IWA, LondonGoogle Scholar
  3. Bedtke N, Gawel E (2018) Linking transition theories with theories of institutions. Implications for sustainable urban infrastructures between flexibility and stability. In: Kabisch N et al (eds) Urban transformations – sustainable urban development through resource efficiency, quality of life and resilience. Springer, Cham, pp 21–44Google Scholar
  4. Bowen A (2011) The case for carbon pricing. Policy brief December 2011. Grantham Research Institute on Climate Change and the Environment, Centre for Climate Change Economics and PolicyGoogle Scholar
  5. Briscoe J (1995) The German water and sewerage sector: how well it works and what this means for developing countries. Discussion paper no. TWU 21. The World Bank, Washington, DCGoogle Scholar
  6. Brown RR, Keath N (2008) Drawing on social theory for transitioning to sustainable urban water management: turning the institutional super-tanker. Aust J Water Resour 12(2):73–83Google Scholar
  7. Brown RR, Keath N, Wong THF (2009) Urban water management in cities: historical, current and future regimes. Water Sci Technol 59(5):847–855CrossRefGoogle Scholar
  8. Buchanan JM (1969) External diseconomies, corrective taxes, and market structure. Am Econ Rev 59(1):174–177Google Scholar
  9. Buchanan JM, Stubblebine WC (1962) Externality. Economica 29(116):371–384CrossRefGoogle Scholar
  10. EEA (2012) Urban adaptation to climate change in Europe. EEA report 2/2012. European Environment Agency, CopenhagenGoogle Scholar
  11. Finger MJ, Allouche P, Luís-Manso P (eds) (2007) Water and liberalisation – European water scenarios. IWA, LondonGoogle Scholar
  12. Gawel E (2016a) Environmental and resource costs under Article 9 Water Framework Directive. Challenges for the implementation of the principle of cost recovery for water services. Duncker & Humblot, BerlinCrossRefGoogle Scholar
  13. Gawel E (2016b) Kosteneffizienz in einer nachhaltigen Wasserwirtschaft. Nachhaltige Entgelte als Schlüsselfaktor. wwt – Wasserwirtschaft Wassertechnik 66(5):32–35Google Scholar
  14. Gawel E, Bedtke N (2015) Efficiency and competition in the German Water Sector between “modernization” and “regulation” (in German). J Public Nonprofit Serv 38(2/3):97–132Google Scholar
  15. Gawel E, Bretschneider W (2014) The affordability of water and energy pricing: the case of Germany. In: Fitzpatrick T (ed) International handbook on social policy and the environment. Edward Elgar, Cheltenham, pp 123–151Google Scholar
  16. Gawel E, Bretschneider W (2016) Content and implementation of a right to water. An institutional economics approach. Metropolis, MarburgGoogle Scholar
  17. Gawel E, Bretschneider W (2017) Specification of a human right to water: a sustainability assessment of access hurdles. Water Int 42(5):505–526CrossRefGoogle Scholar
  18. Gawel E, Kuhlicke C (2018) Efficiency-equity-trade-off as a challenge for shaping urban transformations. In: Kabisch N et al (eds) Urban transformations – sustainable urban development through resource efficiency, quality of life and resilience. Springer, Cham, pp 45–60Google Scholar
  19. Gawel E, Köck W, Schindler H, Kern K, Holländer R, Rüger J, Anlauf K, Töpfer C (2014) Reform der Abwasserabgabe: Optionen, Szenarien und Auswirkungen einer fortzuentwickelnden Regelung (= UBA-Texte 55/2014). Umweltbundesamt, Dessau-RoßlauGoogle Scholar
  20. Gawel E, Köck W, Kern K, Möckel S, Fälsch M, Völkner T, Holländer R (2011) Developing waste water charges and water extraction charges into an all-embracing water utilisation charge. Final report – summaryGoogle Scholar
  21. Gawel E, Köck W, Fischer H, Möckel S (2017) Charging pharmaceuticals – drawing on the pharmaceutical sector for measures to reduce micro pollutants in waterbodies. Final report (in German). LeipzigGoogle Scholar
  22. Hayek FA (1968/2002) Competition as a discovery procedure. Q J Austrian Econ 5(3):9–23Google Scholar
  23. Hoque SF, Wichelns D (2013) State-of-the-art review: designing urban water tariffs to recover costs and promote wise use. Int J Water Resour Dev 29(3):472–491CrossRefGoogle Scholar
  24. Hummel D, Lux A (2007) Population decline and infrastructure: the case of the German water supply system, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in ViennaGoogle Scholar
  25. Larsen TA, Gujer W (1997) The concept of sustainable urban water management. Water Sci Technol 35(9):3–10CrossRefGoogle Scholar
  26. Mekonnen MM, Hoekstra AY (2016) Four billion people facing severe water scarcity. Sci Adv 2(2):e1500323. CrossRefPubMedPubMedCentralGoogle Scholar
  27. Metropolitan Consulting Group (2006) VEWA survey comparison of European water and wastewater prices. MCG, BerlinGoogle Scholar
  28. Möckel S, Gawel E, Kästner M, Knillmann S, Liess M, Bretschneider W (2015) Einführung einer Abgabe auf Pflanzenschutzmittel in Deutschland. Duncker & Humblot, BerlinCrossRefGoogle Scholar
  29. North DC (1990) Institutions, institutional change and economic performance. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  30. OECD (1992) The polluter-pays principle – OECD analyses and recommendations, OECD- Environment Directorate. OCDE/GD(92)81. OECD, ParisGoogle Scholar
  31. OECD (2007) Infrastructure to 2030 (Vol. 2): mapping policy for electricity, water and transport. OECD, ParisCrossRefGoogle Scholar
  32. OECD (2008) OECD glossary of statistical terms. OECD, ParisCrossRefGoogle Scholar
  33. OECD (2009) Managing water for all: an OECD perspective on pricing and financing. OECD, ParisGoogle Scholar
  34. OECD (2010) Pricing water resources and water and sanitation services. OECD, ParisCrossRefGoogle Scholar
  35. Oelmann M, Czichy C, Jardin N (2016) New water pricing models respond to decreasing demand in Germany. J Am Wat Works Assoc 108(1):20–23CrossRefGoogle Scholar
  36. Oelmann M, Czichy C, Gendries S (2017) Neue Tarif- und Gebührenmodelle aufgrund veränderter Trinkwassernachfrage. wwt – Wasserwirtschaft Wassertechnik 67(3):17–20Google Scholar
  37. Rogers P, de Silva R, Bhatia R (2002) Water is an economic good: how to use prices to promote equity, efficiency, and sustainability. Water Policy 4(1):1–17CrossRefGoogle Scholar
  38. Sauer J (2005) The economics and efficiency of water supply infrastructure logos. BerlinGoogle Scholar
  39. Stavins RN (2003) Experience with market-based environmental policy instruments. In: Mäler K-G, Vincent JR (eds) Handbook of environmental economics, vol 1. North-Holland, Amsterdam, pp 355–435Google Scholar
  40. UNICEF, WHO (2015) Progress on sanitation and drinking water: 2015 update and MDG assessment. WHO Press, GenevaGoogle Scholar
  41. van der Brugge R, Rotmans J, Loorbach D (2005) The transition in Dutch water management. Reg Environ Chang 5(4):164–176CrossRefGoogle Scholar
  42. Zschille M (2015) Consolidating the water industry: an analysis of the potential gains from horizontal integration in a conditional efficiency framework. J Prod Anal 44(1):97–11CrossRefGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Department of EconomicsHelmholtz Centre for Environmental Research – UFZLeipzigGermany
  2. 2.Institute for Infrastructure and Resource Management, Faculty of Economics and Business ManagementLeipzig UniversityLeipzigGermany

Personalised recommendations