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Applying the European Water Framework Directive (2000) and addressing water allocation issues with economic tools in the Guadalquivir (South Spain)

Miguel Llamazares

Hashemite Kingdom of Jordan – Ministry of Water and Irrigation

Agence Française de

Développement –

French Agency

for Development

Marseille Center

for Mediterranean IntegrationEnvironment and

Development of the

Mediterranean

RECENT EVOLUTION AND

BACKGROUND

1

Background

• Guadalquivir river:

– South Spain

– Mediterranean climate

– 25% Spanish irrigated area

– Competitive agriculture (olive,

citrus, field crops)

– Average rain 580 mm

– Average irrigation dose: 3800 m3/ha

• Historically irrigated since roman

colonization, strong Al-Andalus

influence

• 1985 Water Law

• 1998 Hydrological Plan

• 2000 WFD

• 2005 No new irrigated area

allowed

• 2005-2008 Moderate draught,

water markets

• 2011 Draft Hydrological Plan

presented

• 2015 PoM implemented

Irrigation area increase

4

Reduction in average dose (m3/ha)

Gross water use Abril/Oct. (2011, own estimation).

6.091

-31%

Date Area (ha) Increase (ha) m3/ha Increase m3/ha Use (hm3) Increase hm3

1992 (PHC) 443.024 -- 6.485 -- 2.874 --

2004 (ETI) 801.157 81% 4.350 -33% 3.485 21%

2008 (P.H) 845.000 92% 3.720 -43% 3.162 10%

Summary: hetereogeneity

6

Closed basins

Water saving as

an endogenous

response to

scarcity

Endogenous

Cost increase

IMPACT OF INCREASED WATER

COST AND SCARCITY

2

Evolution of demand in Guadalquivir

8

Technical change (water

saving)

Cost increase

Demand is

more ‘rigid’

Increase productivity

Reduced dose

No more irrigated area

allowed since 2005

Evidence I: Water savings Guadalquivir mixed cropping

Irrigation units with coloured bars save water by three combined

measures:

- Volumetric pricing (“binomic” tariff = fixed cost + variable cost)

- Increase water cost from zero (flat rate before reform) to (3-6 cent/m3)

- Pressurized networks, improved irrigation on farm.Result: average ‘wet’ water savings around 25%

Effect of combined

measures in modern

irrigation (colored bars:

volumetric tariff, cost

increase, network

improvement)

is difficult to

individualize role.

Effect of

measures:

water savings

25%

9

Evidence II: Olive irrigated in Upper Guadalquivir (2008)

10

Higher cost reduces water

consumption.

Surface water (low elevation)

Water is

expensive

Groundwater

WFD AND PROGRAM OF

MEASURES

3

Anual cost of PoM (2015)

Investment 5.502.273.498Administration 4.775.442.269Users 726.831.229

AEC(*)O & M Cost 350.068.061

649.447.216

Public services and RDP 89.748.211Users 260.319.850

Depretiation+interest 299.379.155Public services and RDP 126.239.908Users 173.139.247

Total cost PoM 649.447.216Users tariffs and cost 433.459.097Public services and subsidies 215.988.119

Detalle de la anterior

AEC= Annualized Equivalent Cost, i= 4%, N= 25 years to 50 years

Criteria for users cost recovery of PdM

Measure & policy Criteria

Sanitation O&M Municipal water tariff 100% recovery

Infraestructure for

sanitation

Annual equivalent cost of invesment

recovery through muniipal or regional

tariffs

Urban distribution

improvementMunicipal tariffs 100%

Cost recovery high supply Increase in recovery from 81% to 89%

Water guarantee

improvementRecovery 100% of services through ‘canon’

Irrigation improvementFarmers pay 100% O& M cost and 40% of

investment costOther measures does not imply payment (e.g. Good Agricultural practices)

Cost of measures

54%- Improve quality

40%

- Water saving

- Guarantee (drought)

6%

- Flow prevention

- Transitional waters

Program of Measures (106 euros)

Inversión Total (€)

O & M cost

AEC %

Cualitative 350,8Point pollution 1.087,2 166,6 233,1 36%Difusse Popllution 310,8 43,2 85,7 13%Environmental restauration 958,1 1,5 32,0 5%

Cuantitative 260,1Supply increase (conventtional)

469,2 5,7 29,5 5%

Agriculture water saving 1.798,3 90,1 182,2 28%Urban water saving 302,6 3,6 25,3 4%Governance 85,5 16,9 23,2 4%

Others 38,6Flow control 441,8 1,0 15,5 2%Cost recovery 0,0 21,0 21,0 3%Transitional waters 48,8 0,6 2,1 0%Total 5.502,3 350,1 649,4 100%

Financial source 106 euros %

Urban tariffs (high) 9 1%

Urban tariffs (low) 262 40%

Irrigation tariffs (high) 14 2%

Irrigators water cost (low) 127 20%

Total users’ cost PdM 412 64%

Cost recovery increase 21 3%

Public administration 216 33%

Sum PoM 649 100%

Annual equivalent cost

Cost efficacy analysis

Measure

Pressurereduction

(1) C/E (euro/m3)

Impactreduction

(gap 2) C/E

(euro/m3)

Most probable'

impact reduction (GL/year)

Increase in policy and control of abstraction 0,017 0,068 80,38

Increase in cost of irrigation water 0,107 1,097 2,20

Volumetric tariff in irrigation 0,162 1,050 5,90

Extension services for irrigators 0,390 2,416 1,58

Improvement of urban networks 0,480 9,868 2,19

Irrigation systems and network improvement

0,663 4,883 35,26

Urban water cost increase 1,055 1,936 9,58

(1) Wet-Savings; (2) ‘Dry savings’= 137, 09

Evolution of cost and tariffs

196%

Tariffs and cost

Annual equivalent cost

Summary (1)

• Globally 67% of Cost (EMC) of PdM is supported directly by users with increase in tariffs and internal cost, rest is supported by Public administration (public services)

• Cost recovery in high-level water services

– Cost recovery 100% of new investment (Breña,…)

– Improvement in cost recovery (high) from 79% al 87%

• High level of global cost increase

– Urban users cost increase (circa 8% yearly)

– Farmer cost of water increase 160%

Summary (2)

Guadalquivir

Program of

Measures UnitsInvestment 5.502,3 million euros

Equivalent Annual cost 618,8 million euros/year

Increase urban services 281,2 million euros/year

Increase irrigation services 147,7 million euros/yearper

capitaInvestment 1.310,1 euro/inhabitantEquivalent Annual cost 147,3 euro/inhabitantIncrease urban services cost (1) 66,9 euro/inhab.yearIncrease irrigation services (2) 173,7 euro/ha/year

(1) 2005 average cost 118 euro per capita-year; (2) increase of irrigation cost around 160% per m3