Swedish Agency for Marine and Water Management

In this report, The Swedish Agency for Marine and Water Management provides guidance on how a limit for disproportionate costs can be determined, based on the agency's right to issue regulations under the Water Management Ordinance (2004:660). The guidance is a support in the application of Chapter 4 of the Water Management Ordinance on environmental objectives and relevant provisions in the Swedish Agency for Marine and Water Management's regulations. The guidance has been developed in collaboration with the Geological Survey of Sweden to also include groundwater. The main principles in assessing disproportionate costs do not differ between surface water and groundwater.

The guidance is primarily intended to serve as a guide for the experts within the county administrative boards, including the regional water authorities, who assess disproportionate costs under Chapter 4 of the Water Management Ordinance. The processes and assessments dealt with in the guidance are complex and thus require that those who practically apply the guidance have prior knowledge in the field.

Assessing the disproportionate costs of environmental measures involves weighing up elements that describe competing interests in decision-making. To make such trade-offs, a range of different assessment methods are available. This report introduces the two methods most commonly used in the literature to weigh the costs and benefits associated with environmental measures and socially beneficial activities such as hydropower: cost-benefit analysis (CBA) and multi-criteria analysis (MCA). The report also describes the so-called Leipzig model.

As EU guidance indicates that economic costs and benefits should be the basis for assessing whether costs are disproportionate or not, CBA can be considered a first choice for assessing disproportionate costs. This is because the very purpose of a CBA is to identify all positive economic impacts (benefits) and all negative economic impacts (costs) of a project and compare them with each other. For the costs to be considered disproportionate, the margin by which costs exceed benefits should be appreciable and have a high level of confidence.

Benefits and costs are easily comparable if they are expressed in the same unit, and CBA endeavours to express them in monetary units as far as possible. A practical problem is that some benefits and costs are difficult to monetise, partly because of a lack of knowledge about their economic importance. This may be the case, for example, for environmental effects that can reasonably be assumed to affect people's well-being through changes in the provision of various ecosystem services, but where there may be insufficient information on both the relationship between environmental effects and ecosystem services and individuals' preferences for various ecosystem services. This practical problem can be addressed in several ways, including by using MCA as a complementary or alternative approach.

The report briefly presents and discusses CBA and MCA, as well as some different ways of valuing ecosystem services and other hard-to-value benefits and costs in monetary units: revealed preference methods, stated preference methods, deliberative valuation and value transfer. In the case of MCA, a range of different types of MCA methods are available. Therefore, examples are given of a number of main MCA methods: linear additive methods, multi-attribute methods, analytical hierarchical process, sorting methods and non-compensation methods.

The Leipzig model is an approach to assess disproportionate costs that follows a different methodological path from CBA and MCA in that it takes as its starting point information on past investments in environmental measures and uses this information to calculate a reference cost that provides a threshold for what constitutes disproportionate costs. The threshold further takes into account the benefits of environmental measures through non-monetary expert judgements.

The purpose of this guidance is to highlight and discuss aspects relating to the need for evidence that can provide support with regard to the benefit side of assessments of disproportionate costs when deciding on exemptions under Chapter 4, Section 10 of the Water Management Ordinance (2004:660). This is done by first looking back at previous recommendations on how the application of economic valuation should be strengthened in the implementation of the Water Framework Directive.

Thereafter, general and specific valuation studies are discussed, where the former, unlike the latter, evaluate water quality improvements without any specific water area being investigated, described or singled out. As an example, the general valuation study that forms the basis for the benefits estimates in the Water District Authorities’ programmes of measures for water 2022-2027 is used.

Finally, the need for evidence is discussed on the basis of valuation studies that are planned to be carried out in the next few years with funding from the Swedish Agency for Marine and Water Management and the Swedish Environmental Protection Agency, respectively, and the knowledge needs that have prompted these studies.

Havs- och vattenmyndighetens plan för tillsynsvägledning enligt miljöbalken är tvåårig och visar den inriktning som Havs- och vattenmyndighetens tillsynsvägledning enligt miljöbalken och lagen om allmänna vattentjänster kommer att ha under åren 2026–2027.

Under 2026–2027 kommer Havs- och vattenmyndighetens planerade tillsynsvägledning särskilt inrikta sig på att stötta genomförandet av den nationella strategin för miljöbalkstillsyn, inklusive de två övergripande fokusområden som Naturvårdsverket har huvudansvar för och som har som syfte att stärka tillsynsmyndigheternas förmåga att utföra tillsyn.