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Using economic assessments to prioritise the programme of measures for Martinique

A total of 86 measures make up the 2016-2021 programme for the Martinique RBMP that sets the objectives for water policy. The overall budget for the measures is 507 million euros. At a time of limited public budgets and when purchasing power remains a prime concern, which measures should have priority for funding? That was the topic of the study titled “Economic assessment and cost-effectiveness analysis” conducted for the Martinique water office.

A decision-aid tool

The Water framework directive proposes using economic assessments to assist in setting up programmes of measures at the least possible cost. That is why the objective of the study, funded by Onema and the Water office and carried out by two consulting firms*, was to assess the measures in terms of their cost effectiveness. The overall aim was to assist the Basin committee and water managers on Martinique in selecting the supplementary measures depending on their effectiveness, i.e. their capacity to preserve aquatic environments and/or achieve good water status at the least cost. This type of cost-effectiveness analysis is all the more necessary when the available budget is insufficient to fund all of the measures. What is the best method to size and organise a programme in which each euro is optimally spent?

Setting priorities

A total of 20 non-regulatory and non-priority measures were selected for the study. Then two regulatory measures were added (improvements in the efficiency of distribution networks and upgrading of non-collective sanitation systems), that represent half of the total budget for the programme of measures and must be implemented either sector by sector or in stages. The analysis was carried out in three steps. During the first, the assessment dealt with the environmental effectiveness of the 22 measures, i.e. their capacity to reduce pressures, and with their cost. During the second step, cost-effectiveness ratios were developed after grouping the measures by type, e.g. infrastructure measures, measures to improve knowledge whose mid to long-term impact can be calculated, measures requiring investments not intended for infrastructure, for example for ecological continuity. The cost-effectiveness ratios served to determine the efficiency of each measure. Finally, analysis of the environmental effectiveness for each water body made it possible to prioritise the areas needing work.

Taking into account social acceptability

Even once it had been optimised, the 2016-2021 programme of measures could not be completely financed with public funds. The study therefore attempted to determine if the various consumers could cover the remaining costs. It was at this point that the notion of the social acceptability of the measures came into play, i.e. the simple fact that the cost borne by consumers must not exceed their capacity to pay. A number of scenarios were developed to determine the potential impact of measures depending on whether costs were transferred to households (water bills), industrial companies (expenses) or taxpayers (taxes). And the results? Implementation of all measures would heavily impact households and farmers, above and beyond acceptable levels. Certain measures to improve the efficiency of distribution networks and upgrade non-collective sanitation systems would increase water bills by 5% to 10% on an island where the cost of water (5.47 euros per cubic metre) is already one of the highest in France. It thus appeared indispensable to select among the competing issues and areas, or to stagger projects over time. On the other hand, measures funded in part by industrial companies and taxpayers would appear to be more acceptable and thus easier to implement. Though they are based on a number of assumptions, these results nonetheless provide decision-makers with valuable information and can contribute, in the framework of collective debates, to setting priorities and identifying areas for programmes of measures. It was in this spirit that the results were presented to the Basin committee.




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