Natural water retention measures (NWRM) are a multifunctional form of green infrastructure that can play an important role in catchment‐scale flood risk management. While green infrastructure based on natural processes is increasingly recognised as being complementary to traditional flood control strategies based on grey infrastructure in urban areas, there are a number of outstanding challenges with their widespread uptake. At a catchment scale, it is widely accepted that NWRM in upstream areas based on the concept of ‘keeping the rain where it falls’ can help reduce the risk of downstream flooding by enhancing or restoring natural hydrological processes including interception, evapotranspiration, infiltration, and ponding. However, both the magnitude of flood risk reduction and the institutional structures needed for widespread uptake of NWRM are inadequately understood. Implementing NWRM can involve trade‐offs, especially in agricultural areas. Measures based on drainage management and short rotation forestry may help ‘keep the rain where it falls’ but can result in foregone farm income. To identify situations where the implementation of NWRM may be warranted, an improved understanding of the likely reductions in downstream urban flood risk, the required institutional structures for risk management and transfer, and mutually acceptable farm compensation schemes are all needed.

Further development of the bioeconomy, the substitution of bioresources for fossil resources, will lead to an increased pressure on land and water resources in both agriculture and forestry. It is important to study whether resultant changes in land management may in turn lead to impairment of water services. This paper describes the Nordic Bioeconomy Pathways (NBPs), a set of regional sectoral storylines nested within the global Shared Socioeconomic Pathways (SSP) framework developed to provide the BIOWATER research program with land management scenarios for projecting future developments to explore possible conflicts between land management changes and the Water Framework Directive (WFD). The NBPs are a set of narrative storylines capturing a range of plausible future trajectories for the Nordic bioeconomy until 2050 and that are fit for use within hydrological catchment modelling, ecosystem service studies and stakeholder dialogue about possible changes in agricultural and forestry management practices.

Abstract. The Water Framework Directive (WFD, directive 2000/60/EC) was created to ensure the sustainable use of water resources in the European Union. A central guideline included throughout the directive is a call for the participation of stakeholders in the management of these resources. Involving stakeholders is an important step to ensure that catchment management plans take into consideration local experience in the development of these plans and the impact of the plans on local interests. This paper describes and analyses the results of a series of workshops to facilitate implementation of the WFD at a catchment level based on the stakeholder participation model, CATCH.To test the usefulness of the CATCH model, developed for water management in a catchment area, a sub-catchment in an alpine valley in the north-east of Italy, the Alta Valsugana in the Province of Trento, was chosen as the setting for a series of workshops. In this valley water is fundamental for activities associated with agriculture, domestic use, energy production, sports and recreation. In the recent past the valley has had serious problems related to water quality and quantity. Implementation of water management plans under the WFD may lead to conflicts within the catchment between different stakeholder interest groups. Including stakeholders in the development of management plans not only follows the guidelines of the WFD but also could result in a more locally adapted and acceptable plan for the catchment.A new stakeholder analysis methodology was developed and implemented in order to identify the relevant stakeholders of the area and then two sets of workshops involving the key stakeholders identified were conducted in Spring 2006. The CATCH meetings were a new experience for the participants, who had to deal with both the principles of the WFD in general and the participation requirement in particCorrespondence to: P. S. Lupo Stanghellini (paola.lupo@mtsn.tn.it) ular. During the meetings, the CATCH model played a very important role in structuring the participatory process. It provided a general framework consisting of a sequence of steps that helped the participants to reach the goal of the process: the identification and evaluation of measures to improve water management in the catchment. This test of the CATCH model showed it to be a dynamic and flexible tool, useful for structuring and guiding the participation process, without imposing undue restrictions on influencing the outcome of stakeholder participation in a small catchment.

There has been a great deal of interest in addressing water quality issues through the use of Transferable Discharge Permit (TDP) systems. Unfortunately, the attempts to start up permit markets that are able to exploit abatement cost differences between sources have not met with the success expected. Two of the reasons for the lack of success have been the problem of transaction costs and in the case of non-point sources (NPS), undefined property rights. The composite market design is a proposal for a TDP system that specifically includes agricultural non-point source (NPS) discharges and addresses both property rights and transaction cost problems. The composite market consists of three interrelated markets each serving a particular function. The two primary markets are coordinated through price information that makes it possible for a catchment-based authority to issue (sell) permits based on the marginal cost of abatement. When the composite market is mature, the total number of permits issued corresponds to a cap on discharges allowed in the catchment. The structure of the composite market allows this system to be phased in over time with existing institutions and limited demands on financing.