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Hashemite Kingdom of Jordan – Ministry of Water and Irrigation

Agence Française de Développement – French Agency for Development

Marseille Center for Mediterranean Integration

Environment and Development of the Mediterranean

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

Miguel Llamazares

1 RECENT EVOLUTION AND BACKGROUND

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) 6.091 1% -3

Date

Area (ha)

Increase (ha)

m3/ha

Increase m3/ha

Use (hm3)

Increase hm3

1992 (PHC) 2004 (ETI) 2008 (P.H)

443.024 801.157 845.000

--

6.485 4.350 3.720

--

2.874 3.485 3.162

--

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

81% 92%

-33% -43%

21% 10%

Summary: hetereogeneity Closed basins

Endogenous Cost increase

Water saving as an endogenous response to scarcity 6

2 IMPACT OF INCREASED WATER COST AND SCARCITY

Evolution of demand in Guadalquivir

Reduced dose Cost increase

No more irrigated area allowed since 2005

Technical change (water saving)

Increase productivity Demand is more ‘rigid’ 8

Evidence I: Water savings Guadalquivir mixed cropping Effect of measures: water savings 25% Effect of combined measures in modern irrigation (colored bars: volumetric tariff, cost increase, network improvement) is difficult to individualize role.

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%

9

Evidence II: Olive irrigated in Upper Guadalquivir (2008)

Water is expensive

Higher cost reduces water consumption.

Surface water (low elevation)

Groundwater 10

3 WFD AND PROGRAM OF MEASURES

Anual cost of PoM (2015) Detalle de la anterior Investment Administration Users

5.502.273.498 4.775.442.269 726.831.229 AEC(*)

O & M Cost Public services and RDP Users Depretiation+interest Public services and RDP Users

350.068.061 89.748.211 260.319.850 299.379.155 126.239.908 173.139.247

Total cost PoM Users tariffs and cost Public services and subsidies

649.447.216 433.459.097 215.988.119

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

649.447.216

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 improvement

Municipal tariffs 100%

Cost recovery high supply Increase in recovery from 81% to 89% Water guarantee improvement

Recovery 100% of services through ‘canon’

Irrigation improvement

Farmers pay 100% O& M cost and 40% of investment cost

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

Cost of measures Program of Measures (106 Inversión O & M AEC % euros) Total (€) cost Cualitative 350,8 Point 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 260,1 Supply increase 469,2 5,7 29,5 5% (conventtional) 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 38,6 Flow 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%

54%

- Improve quality - Water saving - Guarantee (drought)

40%

6%

- Flow prevention - Transitional waters

Annual equivalent cost

Financial source

106 euros %

Urban tariffs (high) Urban tariffs (low) Irrigation tariffs (high) Irrigators water cost (low) Total users’ cost PdM Cost recovery increase Public administration Sum PoM

9 262 14 127 412 21 216 649

1% 40% 2% 20% 64% 3% 33% 100%

Cost efficacy analysis Measure

Increase in policy and control of abstraction

Increase in cost of irrigation water Volumetric tariff in irrigation Extension services for irrigators Improvement of urban networks Irrigation systems and network improvement Urban water cost increase

0,017 0,107

Impact reduction (gap 2) C/E (euro/m3) 0,068 1,097

Most probable' impact reduction (GL/year) 80,38 2,20

0,162

1,050

5,90

0,390

2,416

1,58

0,480

9,868

2,19

0,663

4,883

35,26

1,055

1,936

9,58

Pressure reduction (1) C/E (euro/m3)

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

Evolution of cost and tariffs Annual equivalent cost

Tariffs and cost

196%

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 Investment Equivalent Annual cost Increase urban services Increase irrigation services

Investment Equivalent Annual cost Increase urban services cost (1) Increase irrigation services (2)

Program of Measures

Units million euros

5.502,3 618,8 million euros/year 281,2 million euros/year 147,7 million euros/year per capita 1.310,1 euro/inhabitant 147,3 euro/inhabitant 66,9 euro/inhab.year 173,7 euro/ha/year

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