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Water Management in the Ebro Basin Workshop Water for Aragon Darmstadt, 28.11.-30.11.2003, Institute of Applied Geosciences, Darmstadt University of Technology Unidad de Economa Agraria Centro de Investigacin y Tecnologa Agroalimentaria de Aragn Diputacin General de Aragn Economic Aspects of Water Management in the Ebro Basin J. Albiac Slide 2 Water Management in the Ebro Basin 1. Water resources in Spain and in the Ebro basin 2. Economic evaluation of water management policies in the Ebro basin: Common Agricultural Policy Water Framework Directive National Hydrologic Plan National Irrigation Plan CONTENTS Slide 3 Water Management in the Ebro Basin Basin planning units in Spain Slide 4 Water Management in the Ebro Basin Ebro Basin Current 1995 1 st horizon 2005 2 nd horizon 2015 Increment Basin Hydrologic Plan Increment National Hydrologic Plan Irrigation6310821398793569 Urban31333835845 Industrial415534 119 Jcar Basin Current 1995 1 st horizon 2005 2 nd horizon 2015 Increment Basin Hydrologic Plan Increment National Hydrologic Plan Irrigation228424202580296141 includ. environm. Urban563613686123 Industrial809211636 Segura Basin Current 1995 1 st horizon 2005 2 nd horizon 2015 Increment Basin Hydrologic Plan Increment National Hydrologic Plan Irrigation1639 0362 includ. environm. Urban1721801841243 Industrial2338 15 Water use and forecasts in Ebro, Jcar and Segura basins (hm 3 ) Slide 5 Water Management in the Ebro Basin Demand and availability according to Basin Plans Ebro water transfer according to National Hydrologic Plan DemandAvailabilityWater transfer volume Ebro703817036-1050 Jcar29273482 300 Segura1834 (1445 NHP)803 420 Sur13502351 100 Demand and availability in Basins and Ebro transfers (hm 3 ) Slide 6 Water Management in the Ebro Basin Ebro water flow at Tortosa (hm 3 /year) Slide 7 Water Management in the Ebro Basin Watersheds in the Ebro basin Slide 8 Water Management in the Ebro Basin Autonomous Communities (states) in the Ebro basin Slide 9 Water Management in the Ebro Basin SPAINAragonCatalonia Community of Valencia 190018.616.630912.7111.966.3821.587.533 191019.990.669952.7432.084.8681.704.127 192021.388.551997.1542.344.7191.745.514 193023.677.0951.031.5592.791.2921.896.738 194026.014.2781.058.8062.890.9742.176.670 195028.117.8731.094.0023.240.3132.307.068 196030.582.9361.105.4983.925.7792.480.879 197033.956.0471.152.7085.122.5673.073.255 198137.742.5611.213.0995.958.2083.646.765 199139.433.9421.221.5466.115.5793.923.841 200141.116.8421.199.753 (3%)6.361.3654.202.608 Population 19002001 Slide 10 Water Management in the Ebro Basin Gross Domestic Product by region (1,000 ) Region1995199920002001 Aragon14,302,18915,922,52616,591,16417,023,594 (3%) Catalonia82,752,57294,088,99897,700,14699,911,085 Valencia41,374,46848,994,44951,290,34853,012,062 Spain437,787,000506,846,000527,613,000542,166,000 Slide 11 Water Management in the Ebro Basin The water sector in Spain Spain is a country with a land surface of 506,000 km 2 and annual precipitations around 346.000 hm 3 (684 mm), with large spatial and temporal rainfall variation. Total river flow is 110,100 hm 3, with a water storage capacity of 56,100 hm 3, and an average storage around 25,000 hm 3. Slide 12 Water Management in the Ebro Basin AgricultureWater supply companies Other productive sectors Direct abstractions 26.4755.1632.049 Utilization Irrigation19.775 Water losses in distribution 4.5171.086 Household consumption 2.354 Other productive sectors (industries and services) 1.7232.049 Abstraction from agriculture is 26.475 hm 3 and utilization 19.775 hm 3 (rest are losses in distribution) Water supply companies abstractions are 5.163 hm 3 supplying 2.354 to households and 1.723 to industries and service sector Industries and service sector direct abstractions are 2.049 hm 3 Returns and discharges to environment are 8.721 hm 3 from agriculture and 2.264 hm 3 from urban and industrial users Water flows in the Economy Slide 13 Water Management in the Ebro Basin Water flows between economy and environment 1999 (1000 m 3 ) Slide 14 Water Management in the Ebro Basin Irrigated area in Spain reaches 3.53 million ha, distributed between 2.16 million ha of arable crops and 0.84 millions of tree crops. Cereals fill 1,093,000 ha generating an income of 1,105 million Industrial crops (sunflower, sugar beet) fill 559,000 ha with 612 million of revenue Vegetables area is 379,000 ha generating a revenue of 4,885 million Citric and non-citric fruit trees fill 540,000 ha and generate 2,400 million . Importance of irrigation in Spain Slide 15 Water Management in the Ebro Basin Cereals and industrial crops have an average revenue per cubic meter much lower than fruits and vegetables: 0.13 /m 3 for cereals 2.00 /m 3 for vegetables and 0.75 /m 3 for fruit trees. Revenue of water in industrial sectors with sizable water demand is much higher: 84.3 /m3 in the agro-food industry 83.1 /m3 in the chemical industry 71.7 /m3 in the paper industry. The average revenue of these industries is between 50 and 100 times large than the more profitable agricultural sectors such as vegetables and fruit trees. Slide 16 Water Management in the Ebro Basin Water prices Prices in the urban sector are close to 0.70 /m 3 Prices in agriculture are much lower, 0.02 /m 3 The value of water environmental services could be high, although no valuation studies are available Slide 17 Water Management in the Ebro Basin Irrigation in Aragn Irrigation acreage in the Ebro basin is around 850,000 ha, of which 370.000 ha in Aragn Slide 18 Water Management in the Ebro Basin Acreage and water use by crop group in Aragn (2002) Acreage (ha)Water use (hm 3 ) Cereals, alfalfa, sunflower298,4452,296 Vegetables8,927 49 Fruits61,670525 Total369,0422,869 Water use (hm 3 )Losses (hm 3 ) Surface2,083833 Sprinkle603121 Drip184 18 Total2,869972 Water use and losses by irrigation system in Aragn (2002) Slide 19 Water Management in the Ebro Basin Cereals in Aragn Slide 20 Water Management in the Ebro Basin Vegetables in Segura basin Slide 21 Water Management in the Ebro Basin Common Agricultural Policy The changes of the Common Agricultural Policy by the Agenda 2000 and the modification of 2003, imply the gradual liberalization of agricultural markets, the reduction in support levels, and the strengthening of environmental requirements. Water Framework Directive The new Water Framework Directive promotes water prices close to full recovery costs and establishes pollution emissions restrictions and quality standards to achieve good status for all waters. National Hydrologic Plan The NHP main project is the Ebro water transfer to solve water scarcity and degradation in Southeast Spain. National Irrigation Plan The NIP objective is to modernize and improve irrigation facilities in Spanish agriculture. Economic evaluation of water management policies Slide 22 Water Management in the Ebro Basin Effects of CAP changes in Aragon Revenue per hectare by county 2006 and 2012 horizons Slide 23 Water Management in the Ebro Basin Net income per hectare by county 2006 and 2012 horizons Slide 24 Water Management in the Ebro Basin Direct payments per hectare by county 2006 and 2012 horizons Slide 25 Water Management in the Ebro Basin -The new WFD promotes water prices close to full recovery costs (including environmental costs) in order to induce water conservation and sustainable management of water resources (problem in southern Europe with prices to solve aquifer degradation). -The Directive establishes a combination of emissions restrictions and quality standards, with specific deadlines to achieve an appropriate quality for all waters and the management implementation of water based on watersheds and user participation. -Management of water irrigation demand in Spain is going to acquire a key role as a consequence of the Water Framework Directive. -Nitrate pollution in Spain affects specially the Mediterranean coast and the Ebro and Guadalquivir watersheds because of the excessive fertilizer application. Water Framework Directive Slide 26 Water Management in the Ebro Basin -Several studies have examined the cost-efficiency of alternative measures to abate nitrogen leaching for some crops (Yadav 1997, Vickner et al. 1998, Martnez 2002), but ranking measures is contingent not only upon crop type but also upon soils. -We have analyzed the measures to reduce nitrate leaching under soil heterogeneity, ranking measures by their cost-efficiency. Nonpoint pollution from nitrates Slide 27 Water Management in the Ebro Basin STUDY AREA 17 municipal districts in Huesca province (85.000 Ha). Sotonera reservoir 187 Hm 3. Information collected Agronomic data and crop management operations by soil type. Weather information. Water management practices by the irrigation district associations. Surface irrigation is the prevailing system. Slide 28 Water Management in the Ebro Basin WHC Water holding capacity (m 3 /ha). EC Salinity (Electric conductivity, dS/m). Soil Productivity Acreage (ha) WHC a Efficiency b EC c UnitSeries AG0ChacillaHigh 2,4781,80060 2.5 AG1PlanterosLow 7,558 73040 2.5 AG2 Corralete s Intermediate17,2632,04360 8.0 AG3ValfondaLow (high salinity) 4,9442,6808012.0 AG4PlanterosLow (dryland) 6911,350- 2.8 Soils Slide 29 Water Management in the Ebro Basin The economic model developed includes a pollution function in order to assess water pollution from agricultural activities in the Flumen- Monegros area of the Ebro basin The crop production and nitrate pollution functions for corn have been estimated using the EPIC crop growth package, that incorporates local information on climate, soils, tillage and operations for crop activities. Slide 30 Water Management in the Ebro Basin DYNAMIC MODEL The objective function is the maximization of social welfare Quasi-rent pollution damage Nitrogen in soil balance equation subject to Leaching function Volatilization function Nitrogen uptake by plant function x t, n t water (mm/ha) and nitrogen (kg/ha) inputs, g t nitrogen in soil (kg/ha), z t corn crop area by soil type, p corn price (/kg), p x water price (/mm), p n nitrogen price (/kg), s subsidies (/ha), k fixed costs (/ha), Where: MODEL Slide 31 Water Management in the Ebro Basin Nitrogen (kg/ha) Water (mm/ha) Corn production function Slide 32 Water Management in the Ebro Basin Abonado de nitrgeno (kg/ha) Agua (mm/ha) Funcin de contaminacin Slide 33 Water Management in the Ebro Basin ChacillaPlanterosCorraletesTotal District Welfare (1,000 ) Leaching (Tons) Welfare (1,000 ) Leaching (Tons) Welfare (1,000 ) Leaching (Tons) Welfare (1,000 ) Leaching (Tons) Base scenario 1,65254403 681,5722143,627336 Water price 0.06 /m 3 1,31147262651,1402132,713325 0.09 /m 3 1,12145184 64 8972142,202323 Nitrogen price 0.9 /kg 1,55652366 601,4731703,395282 1.2 /kg 1,41650331 531,3841283,176231 Nitrogen standard 1,61732417 381,660 903,694160 Emission tax 1,71649473 441,756 793,945172 Results Control measures can be discriminated by soil type (and by crop) The first best instrument is an emission tax, but not feasible The second best instrument is a standard on fertilizer, applied in vulnerable soils Planteros and Corraletes Land use tax, linked to soil and crop (transaction costs?) Slide 34 Water Management in the Ebro Basin National Hydrologic Plan: Ebro Water Transfer Water demand scenarios in Levante and NHP allocation (hm 3 ) Jcar basinSegura basinSouth basinTotal Levante Water Demand Reduction for Agricultural Use...by banning aquifer overexploitation15722671454...by increasing 0.12 /m 3 water prices14126337441...by increasing 0.18 /m 3 water prices32532751703 NHP Allocation All uses300420100820 agricultural and environmental use14136258561 urban and industrial use1595842259 Effective Demand of Water for Agricultural Use...at prices for transferred water (0.19 to 0.75 /m 3 ) 8632151121,190 Slide 35 Water Management in the Ebro Basin Net income losses under alternative scenarios and subsidies (million /year) Jcar basin Segura basin South basin Total Levante Net Income Losses to Farmers...... by banning aquifer overexploitation2476204304... by increasing 0.12 /m 3 water prices1809421294... by increasing 0.18 /m 3 water prices26312930423 Subsidies Needed for the NHP to cover the gap between transferred water costs (0.19 to 0.75 /m 3 ) and present low water prices 5216944265 Slide 36 Water Management in the Ebro Basin Scope: 35 counties, 423.000 ha of irrigated acreage 94% Valencia 80% Murcia 86% Almera Crops : Orange, mandarin, lemon, peach, apricot and almond trees, vineyards, olive trees, lettuce, tomato, artichoke, melon, pepper, onion, watermelon, bean, pumpkin, cucumber, broccoli, potato, wheat, barley, corn, rice, alfalfa, and sunflower. Tomato, pepper, melon, bean, and watermelon crops can be cultivated protected (green house) or not protected. Methodology: Linear programming Objective function: Net income 80 crop activities and 60 constraints 22 soil constraints 12 water constraints 12 labor constraints Study financed by the Spanish Ministry of Environment and the Aragn Govern- ment Description of the model Slide 37 Water Management in the Ebro Basin National Irrigation Plan Modernization and improvement of irrigation management Cost-benefit analysis of investments in modernization: - network channels -field irrigation systems (surface to sprinkle and drip) -changes in nonpoint pollution Cost-benefit analysis with and without public subsidies Possibility of expanding high profitable crops (vegetables) Slide 38 Water Management in the Ebro Basin 28 villages (65.000 ha). Corn and alfalfa (50%), barley and wheat (30%), vegetables (3%). Irrigation: surface (92%). Efficiency: 50% Study area: Cinco Villas county in the Bardenas irrigation district Slide 39 Water Management in the Ebro Basin Cost-benefit analysis of investments with subsidies Crop Sprinkle Solid-set Pivot Drip Central Government Corn-268781- Barley-3.179-2.131- Wheat-1.779-731- Alfalfa-3.426-2.378- Sunflower-2.272-1.223- Tomato--47.106 Pepper--23.249 Autonomous (State) Government Corn2.0202.651- Barley-892-261- Wheat5081.139- Alfalfa-1.139-507- Sunflower15,8647- Tomato--49.224 Pepper--25.368 Net Present Value by crop (/ha, including damage of nitrate pollution) Slide 40 Water Management in the Ebro Basin Additional questions: -Effects of modernization on water flow in basin (reduction 1000 hm 3 ) -Environmental effects of expanding high profitable crops (vegetables) VariablesBaseVegetables surfaceVegetables drip Acreage (ha)14.284 Corn (ha)3.718-- Barley (ha)819-- Wheat (ha)1.589-- Alfalfa (ha)3.959-- Sunflower (ha)1.833-- Rice (ha)530-- Tomato (ha)2205.714 Pepper (ha)6068.570 Set-aside CAP (ha)1.010-- Revenue (10 6 )17,571,398,1 Net income (10 6 )10,343,470,1 Water use (hm 3 )9711157 Nitrogen use (MT)2.3983.0722.912 Labor use (man-years)3552.3302.258 Percolation (hm 3 )33545 Nitrogen leaching (MT)45590334 Slide 41 Water Management in the Ebro Basin Work to be done Generate information relevant for the Water Framework Directive: Current situation of watersheds (2004) Management plan and measures (2008) YearIssueReference 2000Directive entered into forceArt. 25 2003Transposition in national legislation Identification of River Basin Districts and Authorities Art. 23 Art. 3 2004Characterization of river basin: pressures, impacts and economic analysisArt. 5 2006Establishment of monitoring network Start public consultation (at the latest) Art. 8 Art. 14 2008Present draft river basin management planArt. 13 2009Finalize river basin management plan including progam of measuresArt. 13 & 11 2010Introduce pricing policiesArt. 9 2012Make operational programs of measuresArt. 11 2015Meet environmental objectivesArt. 4 2021First management cycle endsArt. 4 & 13 2027Second management cycle ends, final deadline for meeting objectivesArt. 4 & 13 Slide 42 Water Management in the Ebro Basin Analytical tools Agricultural and land use activities models, to assess water resource quantities and nonpoint pollution (nutrients, salts, pesticides) Example of new information technologies: evapotranspiration using remote sensing