Revision of the Swiss Water Fee System: Distributional Effects and Long Term Aspects
The revision of the water fee system is considered among the most important challenges ahead for Swiss hydro. The complementary study “Revision of the Swiss Water Fee System: Distributional Effects and Long Term Aspects” examines two aspects of the reformation of the water fee system: 1) potential shifts in financial streams to companies, cantons and municipalities under a mixed fixed-variable water fee regime; 2) long-term impacts of water fees (i.e. investments, external impacts, uncertainty and sustainability issues), on the economic and financial effects on cantonal and regional level, as well as the impact on the upcoming renewal of concessions. The focus of the complementary study is aligned with the ongoing political process for the reformation of the water fee framework.
Project description
The complementary study focuses on two aspects of the reformation of the water fee system: First, it highlights the potential shifts in financial streams to companies, cantons and municipalities under a mixed fixed-variable water fee regime. Using a set of potential market development scenarios, the distributional effects of the proposed water fee adjustments are examined. Second, the derived insights on changed water revenues and fees are used to evaluate the role of water fees for long-term aspects (i.e. investments, external impacts, uncertainty and sustainability issues), on the economic and financial effects on cantonal and regional level, as well as the impact on the upcoming renewal of concessions.
The research on operational and revenue estimates is linked with the financial streams in and between cantons. Taking these results into account as well as an investment analysis and the regional and conceptual research the long-term prospects of a change in the Swiss water fee framework is evaluated.
The complementary study builds on the existing work carried out in the NRP 70 joint project ‘The Future of Swiss Hydropower’.