About Us / Water Economics Unit
About Us
Water economics unit

REKK.AQUA, the Water Economics Unit of the Regional Centre for Energy Policy Research, is primarily concerned with the economic analysis of water resource utilisation and water damage prevention activities in Hungary and the Central-East-European region. Our approach is to interpret and explore the partial impacts of sectors, usually considered separately, on river basins and water resources in a coherent, socio-environmental context.

Water is considered as a strategic element of the 21st century, the social impacts of water scarcity and the disruption of predictable water resource uses are increasingly in the forefront of climate change concerns. Economics, however, has an ambivalent attitude to the issue. Currently, the established, classical tools of economics play a limited role in shaping policy responses to water challenges. Not unrelated to this situation is a succinct statement in a 2011 OECD report: 'The "water crisis" is largely a governance crisis. However, from a spring to the water circulation above land economics could enable communities to effectively manage their precious commons.

Our works so far and the lessons learned from them show that this challenge can be overcome, and the application of economic instruments, from drinking water to flooding and desertification, can contribute to a more effective response to today's local and global socio-environmental challenges. The following articles and key analyses provide an overview of our work, carried out in collaboration with experts in related fields.

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Settlement level: drinking water supply, water utility infrastructure and water resources

The issue of drinking water is both a resource access and a water infrastructure maintenance and regulation issue. Providing a sustainable service is mixing social, economic and natural challenges for both smaller settlements and cities with extensive agglomerations in organizing a public service that have a monopoly position to be kept under control.

In addition to domestic service organization and regulation issues, we have experience with regional and broader international cases.

REKK.AQUA projects, focusing on the water utility sector

Articles:

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Landscape level: river basin management, flood risk managementand and land use issues

Water management and land use are two sides of the same coin. It is appropriate to look at a river basin as an interconnected grey-green infrastructure network where management solutions need to be developed to simultaneously address the maintenance, the capacity bottleneck and resource scarcity challenges.

REKK.AQUA projects, related to the wider field of water basin management and flood risk mitigation

Today, only a fraction of the high-level legal framework provided by the EU's interlinked Water Framework and Floods Directives are being used. The Directives essentially create the key preconditions - the allocation of rights and responsibilities - for the use of economic instruments. The water body assessments of the six-yearly review cycles provide sufficient information for interpreting scarcities and externalities at the landscape scale and formulating policy responses. We participated in the expert group of economists supporting the preparation and first review of the National River Basin Management Plan (2009, 2015). In the EU-FP7 research program, EPI-Water – “Evaluating Economic Policy Instruments for Sustainable Water Management in Europe”, we have carried out analyses of fluvial and pluvial flood problems in the Tisza River basin. Subsequently, we have also participated in several applied research projects related to the development of flood-peak polder operation along the Tisza River and the related land use optimization issues.

Articles, based on our experiences:

We participate in collaborations that promote the practical application of the scientific results of the water-land nexus. The LAND4FLOOD network (Spatial Flood Risk Management on Private Land) aims to link the multidisciplinary knowledge elements and practitioners needed to implement successful policies, ranging from engineering and ecological sciences to legal and economic approaches. Thecollaborationaddresses the fundamental issue of Nature Based Solutions for adaptation to water management issues beyond floods: it explores and makes available policy solutions to resolve conflicts of interest around multi-purpose land use.

The broader relationship between flood risk management and land use, and the economic conditions for the development of multi-purpose land use that enables higher social utility, have been investigated in several research programs we participated.

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Global linkages: the Energy-Water-Land-Climate nexus

Successfully addressing water challenges is not possible without taking into account the diverse connections that water creates across ecosystems and societies. This is our long-term, synthesis driven research theme on the frontiers where economic policy instruments can deliver solutions for enhancing the vegetation driven terrestrial water cycle, the most fundamental ecosystem service over land.

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We founded the water economics unit of REKK in 2007, built on our collegues' previous work on the field. (Relevant elements of this work can be found in this link.)