Posted by admin on 14/06/08
Groundwater Extraction Tax, Netherlands
Background
Drinking water in the Netherlands is produced from groundwater as well as from surface water. One of the goals of water policy is to reduce the amount of drinking water produced from groundwater relative to that produced from surface water. However, groundwater-based drinking water is in general less expensive. The groundwater tax therefore reduces the price difference between the two kinds of drinking water.
Introduced: January 1995
Aims
The primary aim of the groundwater tax is to raise revenue. Introduction of the groundwater tax made it unnecessary to raise other taxes (e.g. labour taxes). Introduction of taxes with an environmental base also fits into the policy of greening the fiscal system.
The secondary aim of the tax is to generate a positive environmental effect. Dutch water policy aims at conserving water to secure future water supply and to mitigate detrimental environmental effects of the extraction of groundwater and the production of drinking water. In particular the impact of changes in the geohydrological regimes on terrestial ecosystems.
Design
The tax applies to the abstraction of groundwater by water works or by other entities (industry; agriculture) and aims to protect the scarce groundwater resource in the Netherlands, which is the source of 70 per cent of the total water supply (the remaining 30 per cent being extracted from rivers and other surface waters) (Ecotec, 2001). The tax is levied from the suppliers of drinking water (water companies), which can pass the tax on to the consumers. For the purposes of the tax, groundwater is defined as "sweet groundwater", i.e. water with less than 300 milligrams of chloride per litre.
Tax Rates
There are three tax rates (VROM, 2006):
Infiltrated groundwater is typically surface water that is infiltrated through sand dunes or other geological layers and is then abstracted. A reduced rate applies to industries up to 2001 and agriculture undertaking their own abstractions. Even at the reduced rate this resulted in a price increase of more than 100% for self extracted groundwater, relative to costs of extraction (Vermeend and van der Vaart, 1998).
Water tax rates under the Environmental Taxation Act €
1998 2000 2005* 2006* 2007 2008 2009
1998
2000
2005*
2006*
2007
2008
2009
Groundwater Tax
Normal Tariff
15.5
16
18.1
18.26
18.55
18.83
19.15
Infiltration discount (1)
12.7
13.4
15.16
15.3
15.54
15.77
16.04
Tap water tax (2)
-
12.9
13.2
14.7
14.9
15.1
15.4
Source: Ecorys, 201; Vewin 2010: 26; Vewin 2006:21
Exemptions
If surface water is infiltrated in the aquifer and extracted again as groundwater by pumping or drainage, the proprietor may ask for a rebate of the groundwater tax.
This infiltration rebate amounts to € 0.1516 per m3 which results in a net tariff for artificial recharge works of € 0.0294 per m3 (VROM, 2006)
The exemptions are (VROM, 2006):
Two further exemptions are motivated by environmental reasons. There is an exemption on the use of groundwater to rinse reusable packaging, e.g., deposit return bottles for soft drinks and beer. There is also an exemption for cold-heat storage projects, if the extracted groundwater is returned to the same water layer in a closed system.
On 1 January 1995, when the tax was introduced, the rate for other, not drinking water, companies was 50% of the rate for water companies. The reason for this lower rate for other companies was that they were at that time already making costly investments in water saving in the context of the Action Plan on Water Saving. A higher tax burden would reduce the financial possibilities for making such investments. In 1999 it was decided that this differentiation in the rates was not necessary any more and that the differentiation could be abandoned in two steps, to be implemented in 2000 and in 2001.
The zero rate for water extracted and infiltrated again in the same aquifer - as practised for cooling water and the drainage of building pits - is motivated by the fact that these extractions cause no or only very minor negative environmental effects. The lower rate (introduced in 2000) for the combination of river bank filtration and artificial recharge is motivated with the argument that, from an environmental point of view, this type of extraction is more preferable than direct extraction of groundwater.
Institutional Arrangements
The tax is administered by the Ministry of Finance and the Central Environmental Tax Unit in Rotterdam. The administrative costs of the scheme are insignificant. There are about 44 water companies, which are subject to the tax, and who pass it on to their customers' bills. With regard to industry and agriculture no figure is available on the number registered, but the tax authorities describe the system as simple to administrate (Ecotec, 2001).
Use of Revenues
The revenue is allocated to the general budget.
Monitoring and Enforcement
Monitoring of water abstraction is done by the water companies, and in the case of other abstractors self-monitoring is in place, with sample control.
Performance
The revenue raised by the groundwater tax is estimated to be about € 169 million in 2005 (CROM, 2006) and €172 million in 2006 (Ecorys, 2011). The exemptions and reduced rates in place, affecting mainly industry and agriculture (e.g. the exemption related to small pumping capacity of 10 cubic metre per hour) have considerably reduced the (potential) environmental effectiveness of the tax by creating room for environmentally-damaging practices (Ecotec, 2001). For example, the pumping capacity exemption created an incentive for farmers to use several smaller pumps, thereby reducing their capacity and not paying the tax. In terms of environmental effects, this resulted in an overexploitation of groundwater. It is thus fair to state that the groundwater tax has a limited environmental effect. Despite the main fiscal objective of the tax, some estimates of the (groundwater consumption) price elasticities have been produced. The original assessments range widely: from 0.05 to 0.30, from inelastic to medium elasticity levels. In 1997 a first evaluation of the groundwater tax was made and sent to Parliament (Vermeend and van der Vaart, 1998). It seems that water savings by industry were found to develop in line with expectations, e.g. a decline in consumption between 2-12 % of the 1995 consumption levels. The Green Tax Commission found elasticities to be of the magnitude of -0.1 hence rather inelastic demand. The decrease in groundwater consumption that could be expected from the implied response amounts to only half of the goal set by policy-makers for reduced groundwater abstraction. The precise effect of the tax on demand from households (which account for 52 per cent of total revenue from the tax) is unclear. For SME's and industries supplied by water works the groundwater tax results in a price increase of about 40% when assessed against the water supply tariffs. For industry with self-extraction of groundwater the price increase is relatively more substantial, e.g. of the order 113%. This is due to the low costs of self-extraction. For Dutch industry as a whole, the revenue collected by the groundwater tax amounts to 0.03 per cent of turnover, or 0.08 per cent of value added. In 1996 it was equivalent to 0.33 per cent of pre-tax profits in industry (calculated on basis of CBS, 1998: 8) (Ecotec, 2001). There were some complaints about the tax during the decision-making process, in particular from water-intensive industries such as beer- and soft-drink producers and dairies.
According to Ecorys (2011), in the Netherlands in the 1990s drinking water was obtained from groundwater and surface water on a ratio about 2/3-1/3, plus a small
amount of dune water. From 1996-2006, the use of surface water increased by 3.7 percentage points to 39.2%. The use of groundwater dropped 2.4 percentage points to a 60% share and the share of natural dune water dropped by 1.3 percentage points to 0.8%
Drawbacks
For households the groundwater tax results in a 27 per cent price increase, measured against average water tariffs excluding sewage costs. Households pay about 52 per cent of the groundwater tax revenue. The possible regressive effects of the tax are unclear (Ecotec, 2001) though it is clear that on average water accounts for a higher proportional of total household expenditure, the lower the level of income. Apart from the possible regressive impact of the tax on poor households, the main equity issue seems to have been the partial exemption offered to industries with self-extraction. The Green Tax Commission recommended abandonment of this exemption, and it expects the main effect to be a beneficial substitution in the supply of low-quality water by the water companies for industrial use (Ministry of Finance, 1998). With regard to the exemption for companies that use groundwater to rinse packaging, there were provisions that made it possible to apply the exemption both to companies with self-extraction and to those supplied by the water companies. Hence, the competition and trade issues are of minor importance.
Related Instruments
The Dutch Groundwater Act empowers the provinces to levy a groundwater charge. The revenue from this charge is earmarked for provincial expenditures in the field of water resources policy. The rate differs over provinces but is comparably low.
The total revenue from the provincial charges amounts to about € 14 million.
There is no formal relationship between these two taxes: they have a different objective, a different legal base and are levied by a different level of government.
References
Ecorys, 2011. The role of market based instruments in achieving a resource efficient economy. http://ec.europa.eu/environment/enveco/taxation/pdf/role_marketbased.pdf
Ecotec, 2001. Study on the Economic and Environmental Implications of the Use of Environmental Taxes and Charges in the European Union and its Member States. In association with CESAM, CLM, University of Gothenburg, UCD, IEEP http://europa.eu.int/comm/environment/enveco/taxation/environmental_taxes.htm
Leder, A., 1996, Taxes with an environmental base and the Dutch green tax commission, 159-170, in Environmental Taxes and Charges: national Experiences and Plans, Papers from the Dublin workshop, Dublin: European Foundation for the Improvement of Living and Working Conditions.
Vermeend, W. and van der Vaart, J., 1998, Greening taxes: The Dutch model, Deventer: Kluwer. Ministry of Finance, 1998, The Dutch Green Tax Commission: A summary of its three reports 1995-1997, Haague: www.minfin.nl/uk/taxation/tax_home.htm (31/1/
Vewin (2006) Water supply statistics
Vewin (2008) Dutch drinking water statistics
Vewin (2010) Dutch drinking water statistics 2008; Vewin no 2009/95/6259
http://www.vewin.nl/SiteCollectionDocuments/Publicaties/Drinkwaterstatisti
eken%202008/Vewin_DutchDrinkingwaterstatistics2008_lr.pdf
VROM, 2006. Environmental Tax on Tap Water. Netherlands Ministry of Housing, Spatial Planning, and the Environment. http://international.vrom.nl/pagina.html?id=9472
Tap Water Tax, Netherlands
In the context of a tax shift from direct to more indirect taxation, it was proposed to set the VAT on drinking water in 1999 on the general VAT-level of 17.5% (instead of the existing lower tariff of 6%). However, Parliament introduced by amendment that the first Dfl. 60 (€27) of the water bill should remain at the lower tariff of 6%. This solution was deemed to be impractical, so in 2000 it was decided to introduce a tax on drinking water and to lower the VAT on drinking water back to 6%. (Ministry of Housing, Spatial Planning, and the Environment)
Introduced
1st January 2000, as part of the Act on taxes with an environmental base.
The primary aim of the tax on water supply is to raise revenue in the context of the policy of the Dutch government for restructuring and greening the fiscal system. The tax gives also a price signal towards water saving. One of the goals of Dutch water policy is to contribute to the reduction of the use of groundwater relative to the use of surface water in water supply. Since groundwater is cheaper to extract than surface water, the tax serves to narrow the price differential. However, the price differential is on average about 1 NLG per cubic metre (EUR 0.45) (Leder, 1998) so only in exceptional cases will the standard rate of the tax succeed in making groundwater abstraction less profitable.
Scope: The tax on tap water is levied on the delivery of (drinking) water to a maximum of 300 m3 per connection per year. The tax is levied from the suppliers of drinking water (water companies), which can pass the tax on to the consumers.
1) Discount on normal rate in case of prior infiltration 2) The tax only applies to the delivery of the first 300 m3
Allocation of Revenue: The revenue is not earmarked for environmental policy but is allocated to the general budget. Environmental policy, like other policy fields, is financed from the general budget.
Exemptions: The supply of water for emergency provisions, like fire taps and sprinkler installations, are exempted from the tax.
The revenue raised by the tax on water supply is estimated to be about Dfl. 250 million per year (euro 113 million). It was estimated to be €118 million in 2006 (ECORYS, 2011). A breakdown of domestic water consumption shows a decrease from 137.1 litres/person in 1995 to 127.5 litres/person in 2005, which is probably due to increased use of technology such as low water toilets and washing machines (ECORYS, 2011). The tax is relatively small compared to the groundwater tax, so hard to disentangle.
VROM, 2006. Environmental Tax on Tap Water. Netherlands Ministry of Housing, Spatial Planning, and the Environment. http://international.vrom.nl/pagina.html?id=9473
Over the last twenty years the Chilean Government has successfully privatised the water and sanitation sector and implemented a regulatory framework that has contributed to the sustainability of the reform. The service offered has greatly improved in quality and coverage.
The process can be divided into three periods:
Water supplies to consumers in urban areas in Chile are metered, and connections are almost universal. Gómez-Lobo (2000) points out that before the system was reformed, water tariffs covered less than 50 per cent of the true economic costs of the service. Steady tariff increases in the 1990s doubled the real charges for Empresa Metropolitana des Obras Sanitarias (EMOS), the service provider in the Santiago metropolitan area. In the absence of intervention, this reform would have posed major stresses on lower income households, and would have been very difficult to implement politically. Cross subsidisation, whereby poorer consumers are subsidised by above average charges to others, such as business customers, could have been implemented, but this creates perverse incentives, including encouragement to corrupt meter readers, illegal diversion of supplies, and the development of private wells. The wider the gap between what business has to pay and what it costs to supply them, the greater these perverse incentives are likely to be.
Rates
The tariff rates are set efficiency where price equals long-term marginal cost. Long-term infrastructural investment costs are included in the water and sanitation services tariff rates. Seasonal demand exists in the Chilean water services where summer demands are significantly higher than other times in the year. Tariffs are not a flat annual rate but reflect increases in demand throughout the year.
The rate is set according to what a fictitious model company would theoretically set the level at to meet demand efficiently over a five-year period (Bitran and Arellano, 2005).
In Chile, it was decided to provide subsidies directly to the most vulnerable. Families are classified in order of priority, with the poorest families receiving highest priority. The central government transfers the block subsidy to the municipalities; the latter use this to pay a share of the water bill for those eligible. Mideplan (The Ministry of Planning) uses household survey information for each region to determine the size the block subsidy needs to be in order to meet a benchmark of support. The share ranges from 15 to 85 per cent of the water bill, for up to 20 cubic metres per month, with the poorest families getting the highest share. The payment is made directly by the municipality to the water utility. In order to qualify for the subsidy, households must not have payment arrears with the service provider. The water companies bill the benefiting households for the net of subsidy amount, and then charge the municipality for the subsidies granted. The municipality will be charged interest for late payment, and the utility can discontinue service to benefiting households if there is non-payment by the municipality. In 1998, almost 13 per cent of households (450,000) benefited, at a cost of $33.6 million, and an average monthly subsidy per household of $10.
The privatisation of water supply and sanitation in Chile has led to a tripling of the average real tariff between 1989 and 2002 (Bitran and Arellano, 2005). Public criticism of these rate increases has occurred even though prior to the reforms those that benefited most were the higher-income households and most intensive users. This reform period coincided with an era of high economic growth (7% per annum) with real incomes rising significantly. It is highly unlikely that the transition would have occurred so smoothly during a period of economic stagnation (Williams and Carriger, 2006). Capital infrastructural investment expenditure has increased due to the privatisation; annual spending increased from $30million in 1974-1988 period to $150million per annum in the 1989-2002 period. This is mainly due to the increased rate of return on capital, due to increases in tariff rates. The tariff rates are determined so that investors will receive a low-risk return of at least 7% on capital expenditures and therefore these companies have the incentive to invest in wastewater treatment (Hearne and Donoso, 2005). The capital investment has led to vast improvements in water and sanitation services. Sewage treatment coverage increased from 17% in 1997 to 81% in 2005 and by 2010 almost all the countries sewage is likely to be treated (Williams and Carriger, 2006). The level of investment needed to attain this coverage could not have been reached if the Chilean Government were responsible for investment. With tariffs set centrally for water and sanitation, efficiency incentives exist for the companies to increase returns on investment. This has happened and these companies perform well on the Chilean Stock exchange (Bitran and Arellano, 2005).
Currently there are 44 potable water companies in Chile. They function as private companies although the state investment company, CORFO, still owns a considerable number of share in most companies (Hearne and Donoso, 2005). Five of Chile's 13 regional water companies were privatised with partial sale to multinationals in 1998. Over the four years since, the private companies water rates have risen by an average of 40 per cent, twice the level of increase in prices by public providers (World Development Movement, 2006).
‘The new regulatory scheme in the Chilean water and sanitation sector has provided the right signals for efficient allocation of resources. It has also proved to be a powerful magnet for private equity, attracting international operators as well as Chilean pension funds. …The Chilean model has attained the goals set for service coverage. But that achievement has come at the cost of severe price hikes. Thus even with the best political handling, the changes in the water and sanitation sector would have been unlikely to survive public scrutiny if not accompanied by vigorous and sustained economic growth, which has helped make it possible for households to pay the price’ (Bitran and Arellano, 2005, p.4).
With the reform in the water policy there was a significant shift of power from the government to water users, while also relieving the government of large investments in water infrastructure and operation and maintenance costs that are also shifted to users. A potentially large environmental benefit of water markets is the incentive they provide for greater water conservation, with the additional benefit of reduced investment requirements for constructing new water infrastructure that in itself can cause significant environmental disruption. On the other hand, large transfers and releases of water may alter temperature and flow conditions in ways that adversely affect fish and wildlife (O Connor, 1998).
One important outcome of Chile’s water policy has been the purchase of agricultural water by urban water suppliers without having to buy land or expropriate water from farmers through state intermediation. (O Connor, 1998).
Charging municipal users of water a price that pays for the full capital and operating costs of the system has yielded many advantages, relative to the situation where householders were paying 50 per cent or less of the full costs. These include (Convery, 2004):
The country’s public administration is relatively efficient and therefore a positive and responsible civilian attitude towards Chilean water policy exists which made it possible to implement complex policies, such as subsidizing drinking water for low-income families and ensuring competition for irrigation subsidies remains open and transparent. (Williams and Carriger, 2006). This has allowed its smooth operation, low debt level and increased capital expenditure in the system over the last two decades. The social consensus that was politically implemented has permitted acceptance of a threefold increase in the price of water services to achieve sufficient quality. The regulatory approach for the Chilean water and sanitation sector is based on price setting that conveys appropriate signals to economic agents, so that they make decisions as if they were operating in a competitive market (Bitran and Arellano, 2005).
Bitran, G. and P. Arellano, 2005, Regulating Water Services, Sending the Right Signals to Utilities in Chile, Public Policy for the Private Sector, World Bank, Note number 286, March 2005. Available at http://rru.worldbank.org/Documents/PublicPolicyJournal/286Bitran_Arellano.pdf
Convery, F.J., editor, 2004, USING ECONOMICS IN THE DESIGN AND IMPLEMENTATION OF ENVIROMENTAL POLICY – INSIGHTS FROM CHILE. Forthcoming
Gómez-Lobo, Andrés, 2000. Viewpoint- Incentive-Based Subisidies: designing Output-Based Subsidies for Water Consumption ( agomezlo@econ.facea.uchile.cl )
Hearne, R. and Guillermo Donoso, 2005, Water Institutional Reforms in Chile, Water Policy, 7 (2005), 53-69.
O'Connor, D. 1998, "Applying economic Instruments in Developing Countries: from theory to implementation", Environmental and Development Economics 4, 101
Williams, S. and S Carriger, 2006, Water and Sustainable development: Lessons from Chile, Global Water Partnership, Policy Brief 2, Technical Committee (TEC). Available at www.gwpforum.org/gwp/library/policybrief2chile.pdf.
World Development Movement, 2006, Water out of GATS: case studies, internet article. Available at: http://www.wdm.org.uk/campaigns/watergats/casestudies2.htm
Posted by admin on 12/06/08
In the early 1990s, the Czech Republic successfully introduced a comprehensive system of economic instruments for environmental policy. The Environmental charges included: air emission charges, CFC product charges, water extraction and pollution charges, sewage charges, charges for waste disposal, land conversion charges, and an airport noise tax. The State Environmental Fund used the revenues collected to provide grants and soft loans for environmental investments on a co-financing basis. In 1996, economic instruments generated US$97 million for the State Environmental Fund. Czech Republic's total environmental expenditure from public and private sources reached an estimated US$1.4 billion or 2.7 percent of GDP in 1996 (Klarer et al., 1999).
The Czech Republic government's aims have been successful in achieving water effluent charges that compare well with the marginal abatement costs they are intended to trigger. Income from pollution charges increased during the early 1990s and peaked in 1994/5. This in turn led to a decrease in the taxable base even when coupled with increased economic growth, examples include dropping emission indicators from stationary air pollution sources and lower estimates of water effluent levels (Klarer et al., 1999).
In general though, charge rates were low in the Czech Republic during the 1990s, they were not adjusted for inflation and administrative costs of emission charges in the air sector are criticised for being high. It was proposed to increase air emission charge rates and decrease the number of chargeable pollutants. However, during the late 1990s charge collection efficiency was estimated to be high. The Czech Republic has had success phasing-in charge rate increases allowing enterprises to gradually adapt to new environmental policies.
In 2000 with the forthcoming accession to the European union underway the eco tax system was under review. Pricing reform in certain sectors, i.e. coal, electricity, and natural gas, remained to be completed. In 1996, revenues generated from the economic instruments was decreasing along with pollution levels, and the Czech Republic was considering other options for achieving continued pollution control and financing goals, i.e. tradable pollution permits and eco-taxation (Klarer et. al, 1999).
In 2000-2001 the first attempt to introduce Environmental Tax Reform into the Czech Republic by the Ministry of Finance and Ministry of Environment failed. Between 2002 and the end of 2004, a series of attempts to implement ETR were unsuccessful. In December 2004 an expert group were set up to inform the government of what needed to be achieved and successful implementation of ETR (Bursik, 2005).
Implementation of the 96/2004/EC directive included increases in taxes on motor fuels and oils, reform of the public finances over a transition period to the end of 2007 for coal, gas and electricity. An electronic toll system to be in place by 2007.
It is envisaged that the tax reform will gradually be implemented over 9 years between 2007 and 2015. The main areas that will face changes in the tax system, as well as those listed above include electricity energy and motor vehicle taxation, including a new tax on coal, hard coal, natural gas and electricity. The aim is to achieve fiscal neutrality such that the tax revenue is recycled and with an increase in environmental taxes there is a decrease in labour taxes but also that low-income households are not unfairly burdened. Reductions in taxation available for renewable and alternative electricity, biogas and CHPs and specified environmentally sound vehicles. A tax refund will be available for public transportation using green electricity (Bursik, 2005).
Electricity Taxation - Externalities - ExternE Methodology
Hard coal
2.8 ct/kWh
Brown coal
3.66 ct/kWh
Nuclear
0.67 ct/kWh
RE hydro
0.0016 ct/kWh
RE photovoltaics
0.005 ct/kWh
With the aim of internalising externalities by 2015.
Source: Bursik, 2005
Allocation of Revenues
In July 2005, the European Commission approved €8m for 2005-2008 in Czech state aid to promote energy efficiency and renewable energy in the transport sector. Measures to be financed include cleaner engines for buses and the construction of park and ride facilities and financial support for the public transport authorities to improve the energy efficiency of their buildings. The fourth measure entails financial support that the Czech Government will give to road, rail and inland waterway infrastructure managers to improve the energy efficiency of this infrastructure. The Commission's analysis has shown that most of these measures do not threaten to distort competition in the transport market or affect competition between Member States. The fifth measure is intended to finance a public awareness campaign on energy savings (ENDS 2006).
Bursik, Martin, 2005, Ecological Tax Reform in Czech Republic, Presentation at Ecotaxes in the New Member States, Green Budget Germany Conference, Berlin, 12th October 2005. Available at: http://www.eco-tax.info/3events/NewEU.html
ENDS, 2006, Environmental Daily Issue 1922, Commission clears national state aid packages, , 25th July 2005. Available at:
http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/05/983
Klarer, Jurg, Jim McNicholas, Eva-Maria Knaus, 1999, Sourcebook on Economic Instruments, for Environmental Policy in Central and Eastern Europe: A Regional Analysis, SOFIA INITIATIVE ON ECONOMIC INSTRUMENTS, Hungary. Available at: http://www.rec.org/rec/programs/sofiainitiatives/ecoinstruments/sourcebook.html
Posted by admin on 03/09/08
Posted by admin on 11/07/12
Cyprus has a climate of mild winters and long dry summers, with drought as a major problem. They entered the EU in 2004 and by then had implemented most of the water directives.
The aims are to conserve water in a water-poor country.
The water tax was introduced in Cyprus in 1984 at approximately the same time as the installation of water distribution to households (Ecorys, 2011).
The water taxes are part of a suite of instruments as follows (Ecorys, 2011):
Several reuse schemes have been introduced, and schemes using treated sewage effluent are now operational and many more are under study or construction. Currently more than 50% of the recycled water is used for irrigation of agricultural crops, either directly or through recharge of aquifers. The rest is used for recharge and for irrigation of recreational areas (landscaping, hotel gardens etc)
When the tax was initially introduced, it was a fixed charge per user. It was later changed to be charged by volume. Water prices remained constant from 1994 to 2004, but as part of a reform of tax in 2004, it increased from 0.45C£/m3 to €0.77/m3 for most provinces (Ecorys, 2011).
Use of revenue
The revenue from the tax was aimed at improving water infrastructure and investment.
After 2004, demand for water decreased from 192 m3 per person in 2004 to 109 m3 per person in 2008. However there was also a drought in this period. The total cost recovery rate increased from 45% in 2001 to 62.1% in 2005 (Ecorys, 2011).