A taxonomy of economic water policy instruments and their dynamic effects for sustainable water management

Economic instruments are widely used in environmental policy; however, their application in water governance often lacks contextual clarity. This paper presents an integrated taxonomy of economic instruments for sustainable water management and proposes a complementary, trajectory-based framework for assessing time-dependent performance. Interventions are characterised by implementation profile (single, discontinuous, or continuous) and by response type (static or dynamic, with reinforcing or eroding effects). Combining these dimensions clarifies how behavioural and institutional adjustment shapes outcomes over time, supporting the design and evaluation of robust, adaptable, and context-sensitive instruments for long-term water sustainability.