After two series of six-year river basin management plans, the EU countries have been able to advance towards achieving common objectives in terms of controlling wastewater, improving drinking water services, and managing flood risks. Efforts to mobilize financial resources to the water sector have hit historical records and they should be maintained. The need to merely improve water supply services and comply with wastewater treatment standards in the 28 EU member states may require investing 289 billion Euros during the present decade.
However, this is only the most visible part of the water investments required. Besides compliance with the sister or technical directives that set the standards for drinking water, wastewater treatment and flood management, substantial efforts are still required to respond to two defining challenges of water development in Europe. One being the decisive advance in the defining objectives of the Water Framework Directive (WFD) of improving the status of EU water bodies and the other how to respond to past degrading trends and to the consequences of climate change.
Besides improving water supply, sanitation and flood control, measures purposely designed to restore water related ecosystems are strictly required to maintain and meet the defining ambitions of the WFD. The main remaining challenge consists in recovering the good conditions of water-related ecosystems and therefore their potential to deliver long-term valuable services such as clean water, biodiversity protection, carbon sequestration, flood control, recreation, and so on.
In terms of the WFD, this will require coordinated efforts to restore the European rivers and lakes, to control the diffuse pollution sources in urban and rural areas and correct the long-lasting damages European water suffered from past industrial and mining pollution.
But even this will not be sufficient to respond to the emergent threats to water security. Investments in building water security, via increased water use efficiency, diversification of water supply sources, adaptation of infrastructures for example are particularly critical in the context of water scarcity and climate change.
Summing up, the accumulation of challenges of water sector from compliance to more stringent standards of water services and flood control in order to improve the condition of EU waters while building water security can only be met with a comprehensive response and will require substantial financial efforts.
A widespread transition towards a water secure economy, equivalent to that of energy transition that will deliver decarbonisation, will require significant additional financial resources and new financial programmes and strategies.
We cannot expect financial resources to be available in the size and the form required to cope with contemporary water challenges. Public budgets and water tariffs are not only scarce but more likely to pay for infrastructures than for the uptake of the necessary water innovations. Decisive public actions will be required to break the barriers that limit the flow of financial resources to water investments. Otherwise, the incentives to lend money will be as low as the possibilities to translate social and environmental benefits into financial gains and the risks of water innovations will still a barrier for their adoption and diffusion, which water innovators will also have to somehow overcome. Market uptake of their ideas should not depend only on the continuous flow of public grants and subsidies.
Building a water secure future requires innovative solutions from science and technology but also innovative financial schemes such as the ones that are being implemented to speed the energy transition and the digital transformation.
To foster water transition, public finance should be seen both as an enabler of innovations and as a lever of financial sources, including `private ones. Only then will financial resources come in the size and the form required.