InnWater Article 8 - The delicate balance in tariff setting

This article discusses the complex challenges of setting water and sanitation tariffs, focusing on the balance between cost recovery, affordability, efficiency, and conservation incentives. Using examples from European contexts, including the Middle Tisza pilot site in Hungary, the article highlights how political interference and prolonged tariff freezes can lead to underfunded utilities, deferred maintenance, and reduced climate resilience. The article also illustrates how tools developed within the InnWater project, such as microsimulation and governance dashboards, can support evidence-based tariff setting by analysing socio-economic impacts and trade-offs between regulatory objectives. This publication is made publicly available for reading. Reuse beyond citation requires permission from the authors.