This paper examines sater subsidies and their influence in consumption and demand on water. Actually, water prizes don't allow the full cost recovery as it's established in the Water Frame Directive of the European Union. In this sense, prizes policy doesn't give adequate information and incentives to consumers. There are different types of subsidies: Direct, indirect and cross subsidies between users ans indeed between countries. A new way of cross subsidies is due to chages of virtual water between countries because of the water that is incorporated in products. We describeb some examples of subsidies in Spain and all over the worl. Water subsidies are perverse when they don't pursuit an objective and the distort the market. Nevertheless, it's necessary to go to positive subsidies in order to achieve a water and an environmental sustainable policy.
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Paper provided by EconWPA in its series Others with number
0505015.
Find related papers by JEL classification: P - Economic Systems Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics Z - Other Special Topics
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