Water resources are environmental assets and therefore have a price. There are market-based methods to estimate costs and benefits, and these make it possible to use cost- benefit analysis as a useful tool to assess the economic effects of abatement of eutrophication or other pollution problems. Benefits range from higher quality drinking water and reduced health risks (Photo 29) to improved recreational uses (Photo 30). The effects on human health from the lack of sanitation and the chronic effects of toxic algal blooms are two of the many indirect effects resulting from eutrophication. Numerous cost-benefit analyses of pollution abatement have clearly demonstrated that the total costs to society of 'no pollution reduction' is much higher than at least a 'reasonable pollution reduction'. Consequently, it is necessary to examine the prevention of pollution and restoration of water quality in lakes and reservoirs from an economic standpoint. The result of such examinations should be applied to assess effluent charges and green taxes. International experience shows that these economic instruments are reasonably effective in improving water quality and solving related water pollution problems. Thus, effective planning and management of lakes and reservoirs depends not only on a sound understanding of these water-bodies as ecological systems but also of their value to people as recreational areas and water resources.In the past, several management strategies were developed and applied to solve problems of decreasing surface and groundwater quality. These were often a response to acute critical situations resulting in increased costs of water. The demand for good quality fresh water was only solved partially and locally; this was because too few resources were allocated too late to solve the problems. Early prevention is by far the cheapest method to avoid later pollution.