New publication: Evaluation of the integral water invoice

Since 1 January 2016, the tariff structure of the integral water invoice in Flanders has changed considerably. Before, tariff structures of the drinking water component greatly differed between the various water companies and there was no fixed charge for the remediation component. After the introduction of the new tariff structure, several studies have been conducted to evaluate the intended effects of the changed policy. SEOR carried out one of these studies, commissioned by the Flemish Environment Agency (VMM). We have developed a method to estimate the price elasticity of tap water and provide insight into the impact of the tariff structure on drink water consumption. The price elasticity of the demand for tap water proves to be relatively inelastic. This implies that the tariff has little influence on consumption.

SEOR also examined, organized and weighed the results of the evaluation in an overarching review of the different studies. The review shows that the adjusted tariff structure overall has had a positive effect. The new structure improves the cost allocation, the affordability and the prevention of water poverty. The only negative effect found concerns the satisfaction of households, which had deteriorated slightly. The intended goal to stimulate sustainable water consumption through economic incentives has not been achieved, because the price elasticity of drinking water is relatively low. Hence, substainable water consumption should be encouraged in a different way.