Water is arguably the most valuable resource on the planet, yet its value is difficult to determine because it is a common natural good for which there is no alternative. Economic instruments have immense potential for enhancing or limiting water use and allocation. In Eastern Partner Countries, water utility revenues typically only cover about 60% of the real operational costs. As a result, utilities have low levels of service, while resources for new investments are even scarcer.
The EU4Environment Water and Data programme aims to assess the strengths and weaknesses of the current economic instruments and tariff systems in Armenia and provide policy-makers with a critical knowledge base for enhancing the enabling water-related investments. Strong political will to reform water-related policy instruments and subsidies can send a powerful signal to investors and international financial institutions, building confidence and appetite for action.
In Armenia, concerns over low water abstraction charges for fisheries, irrigation, drinking water and industry are the focus of analysis. Irrigation charges and the performance of water user associations are being investigated to understand differences in performance and the levels of subsidy received.