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Jalon River Basin Lower Jiloca Session A2 Financial strategy to deal with social/economic impacts

Jalon River Basin Lower Jiloca Session A2 Financial strategy to deal with social/economic impacts. Ebro River Basin Authority Ministry of the Environment Spain. Introduction. Main methodological issue tackled Overall procedure with integrated social/economic and benefit analysis

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Jalon River Basin Lower Jiloca Session A2 Financial strategy to deal with social/economic impacts

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  1. Jalon River Basin Lower Jiloca Session A2 Financial strategy to deal with social/economic impacts Ebro River Basin Authority Ministry of the Environment Spain Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  2. Introduction • Main methodological issue tackled • Overall procedure with integrated social/economic and benefit analysis • Relevance in respect to the request of the Water Directors • Affordability and financing mechanisms. • Social and economic costs and cost recovery • Cost of inacton/benefits Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  3. RIBOTA RIVER MANUBLES RIVER LOWER JALÓN UPPER JALÓN LOWER JILOCA UPPER JILOCA MIDDLE JALÓN SUBCUENCA DEL JALÓN EN LA D.H. EBRO Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  4. 5 steps • Step 1 Preliminary information • Step 2 Preliminary evaluation – Prescreening/grouping • Step 3 Applying Criteria of disproportionality • Step 4 Applying additional criteria for less stringent objectives. • Step 5 Proposing alternative date or environmental objectives for the water body. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  5. Step 1: Preliminary information (pressures and impacts, gap and other information) • Pressures and impacts: In the lower Jiloca river summer flow are usually incompatible with good ecological status. • Pressures responsible for this impact are mainly water abstractions through small dams constructed all along the river. • Low flow also exacerbates salinity and nutrients concentrations. • Microbiological parameters reflect also problems of insuficient urban waste water treatment. • Location: • Water body: 323, 109 • Gap for different parameters: • BIOLOGICAL IND. (observed): IPS=8,8, IBMWP=64 • HIDRO-MORPHOLOGICAL IND. (observed): Qmed March= 0,13 m3/s ; 27 BARRIERS IN 60 KM (NO FISH PASSES) • PHYSICAL-CHEMICAL IND. (observed): NO3= 21,7 (mg/l) ; PO4=0,44 (mg/l) ; Conductivity = 1.140 (micro-s/cm) Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  6. SURFACE WATER BODIES STATUS (IN 2006; Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  7. Step 2: Preliminary evaluation –measures and cost Measures to achieve good water status: . • IMPLEMENT URBAN WASTEWATER TREATMENT; • ADDITIONAL WFD MEASURES: • URBAN WASTEWATER TREATMENT in small municipalities; • RIVER MORPHOLOGY; • IRRIGATION IMPROVEMENT; • TREATED WASTEWATER RE-USE; • Abstraction control; • CONTROLED DEFICIT IRRIGATION. Costs of the measures (additional WFD and other Water Directives): 3 Million Euros (1.3 Million from urban WWT) Implementation problems/constraints • PoM requires an important investment in a territory small and with little population. • Economic activities could be affected, because using less water in irrigation may cause production losses. Social concerns becasue of lack of alternatives locally. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  8. Step 3 Applying criteria of disproportionality: ability to pay and social/spatial concerns DISTRIBUTION OF COST AMONG THOSE CAUSING THE PROBLEM – IF COST RECOVERY POSSIBLE- OR FINANCING AUTHORITIES. • Under a Financial strategy with 100% cost-recovery for UWWT directive and additional measures • around 1.310.000 €/year for domestic users (178 €/hab and year, 3,25 €/m3 more in water services bill), • another 1.310.000 €/year for industrial users (7% GVA industrial, 7,2 €/m3 more in water services bill) • 86.000 €/año (31 €/ha and year, 0,01 €/m3 more in water services bill, 2,4% net margin) for agriculture. • WATER BILL INCREASE SEEMS DISPROPORTIONATE FOR INDUSTRY AND DOMESTIC USERS Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  9. Step 3 Applying criteria of disproportionality What measures need to be paid through the public budget? Is there enough public budget available? Public investment in water services in the area has accounted for around 4 times necessary PoM public costs. • NO PROBLEMS ON PUBLIC BUDGET Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  10. Step 3 Applying criteria of disproportionality- alternative financial strategies Is there are alternative FINANCIAL STRATEGY? POSSIBLE EXCEPTION ON ART. 9 WFD • If domestic and industrial users receive a subsidy or cross subsidies lowering to 66% of cost increase of water bill for water services after PoM, prices increases could be acceptable: • 1,08 €/m3 (domestic; HIGH impact) • 2,4 €/m3 (industrial; MEDIUM impact). • Total costs for Public budgets/or other users would be acceptable (2.228.000 €/year, 78% of yearly recent investment capacity). • Prices increase still seem high for the area and may be against spatial and Regional development goals. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  11. Step 3. Applying criteria of disproportionality: Costs an benefits Describe and rank types of benefits (NON MONETARY VALUATION) From implementing existing Directives • Human health: HIGH. 24% of poulation in this area has suffered point episodes of low quality drinking water in last two years. From additional WFD measures • Reduction risks of drought: HIGH. Less water application in crops and use of WW increases guarantee. This area suffer often lack of water supply for agriculture. • New enviropnmentally valuable sites LOW. • New economic activities: MEDIUM important spa tourism in this area. Any improvement in the river may be profited to widen touristical offer. • Better recreation opportunities: MEDIUM no relevant fishing currently, some potential (60 km river). • B) Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  12. Compare costs of the measures with benefits of measures. • Qualitative appreciation show that benefits seem at least at same order than costs. Mainly resuloting from the implementation of the UWWT Directive. Benefits to human health. • But also benefits because of improved guarantee of supply are additional Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  13. Analysis of alternative means to achieve socio economic needs that are a better environmental option What are the socio economic and environmental needs served by the activity/means that causes the problem? Step 4 Applying additional criteria for less stringent objectives • NOT REQUIRED GIVEN HIGH BENEFITS AND ALTERNATIVE FINANCIAL STRATEGIES Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  14. UPPER JILOCA. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  15. RIBOTA RIVER MANUBLES RIVER LOWER JALÓN UPPER JALÓN LOWER JILOCA UPPER JILOCA MIDDLE JALÓN SUBCUENCA DEL JALÓN EN LA D.H. EBRO Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  16. Problem of the water body: • There are 12.000 has. of irrigated agricultural land in the influence area of these surface and ground water bodies, even if an important share of this land only receives “support” irrigation for winter cereal crops. • Its in-plot application efficiency may be reduced due to the high permeability of the soil in this area, and the use of flood irrigation in many plots, driving to an important infiltration of water returnees containing crops superavits of applied nitrogen (from both organic and inorganic sources). • Part of this area has been declared as Vulnerable Zone, • Nitrogen concentrations around 25 mg/l in surface water bodies are a decisive setback to reach ecological good status, as show biological available indicators. • Interactions between water bodies are decisive for environmental status in this area. Step 1: Preliminary information Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  17. UPPER JILOCA WATER BODIES AND IRRIGATION AREA Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  18. Location: River Jalón Sub-Basin, Ebro District, Aragón Autonomous Community. • Water body: • Surface WB (river): 871 canal del Alto Jiloca; 322 Río Jiloca desde los Ojos de Monreal hasta el río Pancrudo. • Surface WB (lake): 1046 Cañizar de Villarquemado; 1047 Cañizar de Alba. • GroundWB: 088 Monreal Calamocha; 089 Cella-Ojos de Monreal Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  19. Parameters of good status (Body): • BIOLOGICAL IND.: IBMWP> 102 • PHYSICAL-CHEMICAL IND.: NO3 (mg/l)< 50 (GWB) ; NO3 (mg/l) < 10 (SWB) • Gap for the different parameters (REPRESENTATIVE DATA 2004-2007; Body 322): • BIOLOGICAL IND. (observed): IBMWP= 58 • PHYSICAL-CHEMICAL IND. (observed): NO3 (mg/l)= 55 ; (GWB 089; year 2006); NO3 (mg/l) = 23,6 Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  20. Step 2: Preliminary evaluation • MEASURES • Basic measures of other Directives: • Nitrates Directive: : in GWB 089 Cella-Monreal (€) Inv= 58.183 ; E+M= 624.784 ; Otros ctes. económicos= 2.101.446 ; CAE= 2.739.299. Includes current Action Programme reinforced control, and ecological agriculture promotion and farmers advice service. Part of these measures could be considered additional? • Additional measures: • Additional Nitrates/diffuse pollution measures: GWB 088 Monreal Calamocha and SWB 322 comply with Nitrates Directive objectives, but do not reach N concentrations compatible with good ecological status of SWB 322. Thus, it is necessary taking measures as imposing N-limits application, mandatory ecological agriculture tecniques and farmers advice service. (€) Inv= 58.183 ; E+M= 527.290 ; Otros ctes. económicos= 1.783.078 ; CAE= 2.323.438 . • MORPHOLOGY IMPROVEMENT: (€) Inv= 1.200.000 ; E+M= 73.000 ; CAE= 129.000 ; Includes riversides restoration (36 has.) and fish passes in small dams (17). Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  21. Plus 3.884.523 € of added costs and reduced production in agricultural activities due to best practices to be imposed (plant cover no tillage). • Existant / additional measures: Vulnerable Zone and Action Programme are already in place for a part of this area, but good ecological status of SWB require additional measures on Nitrates, as mandatory ecological agriculture tecniques. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  22. It is not clear if reduction on GWB 088, 089 nitrates concentration may be achieved before 2015 because of natural conditions (residence time of groundwater, N content in the soil). Further information is needed. • Negative economic impacts seem important because of ecological agriculture introduction (new costs for farmers). FURTHER ANALYSIS REQUIRED Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  23. Step 3.1 Applying criteria of disproportionality Ability to pay of users and polluters: VERY HIGH EFFECT. • Net Margins of agricultural farms (irrigated) would be cut over 40% (even bigger for non-irrigated farms). Their economic feasability would be very seriously compromised. • In addition, this area has a family income under regional and national average (10.500 euros / year, against 12.400 euros / year in Aragón as a whole). • Farming and food industry conglomerate in the area has a very important weight in the local economy (34% of employment). ALTERNATIVE FINANCIAL STRATEGY HAS BEEN ASSESSED, ALLOWING A SUBSIDY FOR FARMS, BUT IT WOULD NOT BE ENOUGH TO COVER LOSSES. Subsidies planned under the draft Rural Dev. Programme could only compensate 4,4% of lost income fo farmers, due to budgetary limitations. Required budgetary increases: MEDIUM EFFECT. A 20% increase on current budget (2008) would needed in the service in charge of Nitrates control, CAP and Conditionality management. It seems an affordable increase to be implemented in the period 2010-2012. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  24. Applying criteria of disproportionality -benefits • Human health improvement: LOW • no continued problems on drinking water, but some point problems in 3 small communities (420 ha., 2,3% of population in the area). • Reduction of services costs, guarantee improvemnet and defense against floods: LOW • New environmental sites: MEDIUM • Wetlands ecosystem: 1.158 has. to be improved as biodiversity refuge as N-concentration went under 10 mg/l. No Communitary Interest Sites in the area. • New economic activities: MEDIUM • There is a potential for ecotourism companies associated to recreation activities, but it has proved in limited in similar sites. • Improvement of recreation activities: HIGH. • Fishing: similar SWB (river Guadalope) in good status generate 25.000 licences per year, what could be the potential of Alto Jiloca if biological communities are recovered (no relevant fishing currently). • Bathing, trekking, and others: 25 km. of natural river improved and 1.158 has. of wetlands and lakes. Similar site (Tablas de Daimiel) receives 112.000 visitors every year (though this could be a too optimistic assumption). Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  25. Issues of irreversibility: • N-concentrations in upper river Jiloca (WB 322) are growing in recent years, thus biodiversity may be deteriorating. Only available information is on macro-invertebrates, that seem steady on a moderate status. Further informtaion would be needed. • Social and economic consequences of PoM: loss of activity in agriculture may drive to population migration, that would be very difficult to recover later. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  26. What are the socio economic and environmental needs served by the activity/means that causes the problem? 25% of employment in this area is inthe agricultural sector, with 1.522 affiliated to Socil Security in year 2005. If also linked agri-industry is regarded, these actvities create 34% of total employment in the area. This activity may create some enviromental benefits linked to irrigation channels habitats (mainly in open channels, especilly ground excavated) and herbal crops habitats and fauna feeding (especially migratory birds). First category of benefits are limited in this case due to modernisation of networks, but second category is relevant because Gallocanta Lagoon is next to this area (RAMSAR site, main refugee of some species on their winter way to the south) and birds look for feeding in a large area (especially from agricultural seeds). Step 4 Applying additional criteria for less stringent objectives Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  27. Step 4 Applying additional criteria for less stringent objectives • Is there an alternative that is a better environmental option? (another activity or means of achieving the socio economic needs such as alternative water supply infraestructures) • There may a potential alternative on ecotourism, deemed information collected on step 3.2 “benefits of good status” about potential use for recreation. Anyhow, this alternative do not seem important enough as to balance losses on agriculture and agri-industry. Touristical development in more favourable areas as "Las Tablas de Daimiel" seems clearly insuficient to substitute farming and food industry conglomerate importance in the area. In addition, grow rates up to 200% (and 400% considering jobs) would be necessary in the touristical sector of this area to counterbalance potential losses in farming and food industry. • NO ALTERNATIVE FOUND. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  28. Improvement in flow regime affecting supply of services to farmers Jalón Medio- Costs being greater than benefits and lack of alternative means Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  29. RIBOTA RIVER MANUBLES RIVER LOWER JALÓN UPPER JALÓN LOWER JILOCA UPPER JILOCA MIDDLE JALÓN SUBCUENCA DEL JALÓN EN LA D.H. EBRO Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  30. 5 steps • Step 1 Preliminary information • Step 2 Preliminary evaluation • Step 3 Applying Criteria of disproportionality • Step 4 Applying additional criteria for less stringent objectives. • Step 5 Proposing alternative date or environmental objectives for the water body. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  31. Step 1: Preliminary information • Problem of the water body: Biological indicators do not achieve good status for altered flow regime due to regulation made by a dam upstream these water bodies to supply irrigation area downstream these water bodies. Only relevant pressure. • Location: River Jalón Sub-Basin, Ebro District, Aragón Autonomous Community. • Water body: Surface Water Bodies 107, 108, 442, 443 (river Jalón from river Piedra until river Ribota). Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  32. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  33. Comparing annual average flow regime before (blue) and after (red) the dam operation • During summer flow is even improved by dam (to supply irrigation areas), but rest of the year there is an important impact. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  34. Step 1: Preliminary information • Parameters of good status (Body 107): • BIOLOGICAL IND.: IPS=12,8, IBMWP=76,6 • HIDRO-MORPHOLOGICAL IND.: Average flow March= 1,89 m3/s • Gap for the different parameters (REPRESENTATIVE DATA 2004-2007; Body 107): • BIOLOGICAL IND. (observed): IPS=10,8, IBMWP=61 • HIDRO-MORPHOLOGICAL IND. (observed): Qmed March= 1,13 m3/s Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  35. Step 2: Preliminary evaluation • Describe the measures to achieve good water status: altering dam management to allow a flow regime compatible with good status. • Describe if it is not technically or naturally feasible to achieve good water status by 2015? Explain reasons and describe if it is possible to achieve it by 2021 or 2027? Time is not relevant in this case. • If feasible describe if we expect it to be disproportional and what woud be the reasons for it. Social and economic needs related to the service responsible of main pressure (dam) are very important (29.000 irrigated has. producing high value added products; 2.000 jobs plus 1.600 in associated agri-industry, in an area with 50.000 inhabitants). FURTHER ANALYSIS IS WORTHY Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  36. COST OF MEASURES In this case there are supplementary measures. The expense associated to the improvement is low becasue it only requires changing the management regime of the dam. The economic impact would be important, considering 50% of irrigation area supplied by dam will have to be abandoned (18,1 M€ GVA lost annually) no expenditures are needed, only negative economic impacts will arise. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  37. Step 3 Applying criteria of disproportionality types of benefits. • recreational fisheries similar to water bodies of similar typology in good water status in the area (5880 fishing licenses per year); HIGH • Improved flood prevention (increased available regulation capacity in dam). Basin with regular floods. MEDIUM • There could not be additional bathing and small navigation opportunities because flow is currently afected in autum and winter when interst on this kind of recreation is lower. LOW • Other kind of benenits are considered LOW or INEXISTANT. Compare costs of the measures with benefits of measures. Are benefits greater than costs? What is the level of certainty? economic impacts GREATER than benefits. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  38. What are the socio economic and environmental needs served by the activity/means that causes the problem? The dam supplies an irrigation area of more than 29.000 Has. producing high value added wine, and fruits. GVA of agriculture 38,2 million euros but measures will affect only 50%. No CAP subsidies but quotas could affect them. Environmental benefits of this activity are linked to the irrigation channels habitats (mainly in open channels, especilly ground excavated); soil conservation by trees. These are limited due to the existing intensive practices and modernisation of networks. Step 4 Applying additional criteria for less stringent objectives Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

  39. Is there are an alternative that is a better environmental option? (another activity or means of achieving the socio economic needs such as alternative water supply infraestructures) There will not be an alternative : neither water service (not alternative supply sources) nor sustainable economic activities with similar GVA and employment to irrigation and agri-industry. Baseline scenario on other economic activities does indicate trends to grow and substitution of irrigation. Would the socio economic and environmental costs of this alternative be disproportionate? (after comparing with the existing means/activities) Disproportionality due to non existence of alternative means that are not disproportionally costly. Workshop on Disproportionate Costs, 10./11.4.2008 Copenhagen

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