Navigating the Water Framework Directive: Implications for agriculture and beyond

The Water Framework Directive (WFD) is a key piece of European environmental legislation introduced in 2000 to deliver on water quality objectives. The Directive introduces a set of principles and measures that rationalize both the supply and the demand for water across member states, with few industries being exempt from its influence. Water is a good with many uses and elements of both public and private ownership. Optimizing its use therefore represents a complex challenge for social planners trading off efficiency and equity dimensions of competing uses of an essentially scarce resource. This paper considers how the Directive introduces economic principles into water use; effectively treating water (quantity and quality) as an economic good rather than a free resource. Focusing predominantly on agriculture, this perspective helps to clarify the nature of all discharge and abstraction uses by the sector and how agricultural uses lead to social tradeoffs with other non-agricultural users. Ultimately, the perspective helps to illuminate how and where water is best employed to maximize its value to society.