Which monetary values for the quality of our environment? The example of pollution in the Krška kotlina alluvial aquifer in Slovenia

Abstract

The increasing integration of economic issues into environmental policy has put the valuation of environmental goods and services at the forefront of the agenda of experts and researchers involved in the design and implementation of this policy. In the case of water, the European Union Water Framework Directive clearly indicates the need to consider environmental and resource costs in designing water pricing policies that better account for the environmental objectives of the Directive. And the assessment of environmental and resource costs is also referred to in the context of the definition of alternative environmental objectives in cases where costs of reaching the Directive's objectives are considered disproportionate or for allowing the development of new sustainable economic activities. The paper presents the application of contingent valuation to assess the environmental costs that originate from groundwater (nitrates and pesticides) pollution in the Krško kotlina aquifer. Average willingness-to-pay values for groundwater quality improvements to stabilize groundwater quality below drinking water standards or to reduce pollution close to natural background concentrations are equal to 4,7 € and 4,8 € per household per month, respectively. The location where respondents live, their income level or their appurtenance or not to an environmental organization are independent variables that influence respondents' willingness to pay. The relatively low overall statistical significance of the regressions obtained stresses that only part of the variability of respondents' responses can be explained with the information obtained and variables considered. This is however in line with similar studies undertaken in other parts of Europe and elsewhere. Overall, the paper demonstrates that contingent valuation is possible under Slovenian conditions. In addition to providing estimate of values of environmental costs and benefits, such contingent valuation surveys would contribute to raising people's awareness on water protection and on significant water management issues faced in Slovenia. Finally, the paper suggests continuing to test and develop different valuation methods in Slovenia for other water types (e.g. surface water) as part of the support to the implementation of the Water Framework Directive.