Instrumentos económicos para la gestión de los recursos hídricos en España

Supervised by:
  1. José Antonio Gómez-Limón Rodríguez Director
  2. Carlos Gutiérrez-Martín Co-director

Defence university: Universidad de Córdoba (ESP)

Fecha de defensa: 22 March 2018

  1. Julio Berbel Vecino Chair
  2. Laura Riesgo Secretary
  3. Carlos Dionisio Pérez Blanco Committee member

Type: Thesis


Irrigated agriculture is much more profitable than rain-fed agriculture, especially in arid and semi-arid regions, where the consumption of this sector accounts for up to 80% of total water use. However, one paramount problem is jeopardizing the future of irrigated agriculture: the increasing water scarcity. This is leading to the closure of basins, a situation where it is not possible to further expand water supply and the currently available resources are fully allocated. Thus, any new potential water user (including the environment) cannot be satisfied without reducing the amount of water already allocated to other users. Under these circumstances, it is necessary to implement demand-side economic instruments that make the water rights system more flexible, in order to allow a dynamic reallocation of water resources towards those with greater social demand. Among these water pricing, water markets and water banks are highlighted. Although the Water Framework Directive (WFD) considers water pricing as a key element for the implementation of demand-side water policy, the empirical studies developed herein that focused on two irrigation districts located in the Guadalquivir River Basin (GRB) refute the usefulness of this economic instrument for reallocating water currently granted for irrigation purposes. In fact, it has been shown that irrigation water consumption does not decrease when cost-recovering tariffs (bellow 0.15-0.20 €/m3) are implemented because water demand is inelastic over this price range; that is, farmers are not willing to change their cropping plans until the tariffs are much higher (above 0.20-0.30 €/m3). Thus, the implementation of water pricing as the WFD suggests neither results in water resources reallocation nor water use efficiency improvement. By contrast, the implementation of this instrument at these prices only results in monetary transfers from the agricultural sector to the public sector, resulting in significant losses of farmers’ income. If water tariffs reach the elastic segment of the demand (above the WFD requirements), this would lead not only to water savings but also to losses of economic efficiency and agricultural employment, which would be significant, thus jeopardizing rural development in regions where agriculture is an important economic activity. An extensive literature review regarding the experience in implementing water banks, both at international and national levels, has demonstrated the potential of this instrument for the management of water resource in a ”closed basin” as a suitable tool to minimize the negative impacts of both structural and cyclical scarcity. Similar to other water markets, water banks permit the voluntary reallocation of water resources towards high-value uses, with the additional advantage of reducing the static transaction costs involved and more effective public control over transactions. This analysis has also revealed that water banks are flexible instruments because they can adopt several designs, each with its own advantages and disadvantages. In this sense, international experience demonstrates that a publicly run active water bank operating at basin level designed to temporarily reallocate water resources is a useful instrument to minimize the effects of cyclical scarcity (drought management). We, therefore, performed an empirical analysis to simulate the implementation of this type of water bank within the GRB using mathematical programming models. This simulation exercise has allowed an ex-ante assessment of the impacts of this economic instrument under different water availability scenarios. The results obtained confirm that this type of water bank is suitable for the management of droughts faced cyclically in this basin because it facilitates temporary water transfer from low to high value-added uses (minimization of economic impact), while simultaneously avoiding reductions in the employment generated by irrigated agriculture (minimization of social impact).