Liberalization and private sector involvement in the water industry: a review of the economic literature

The theoretical and empirical literature on water supply and sewerage liberalization is reviewed in this paper in order to discuss the potential for market creation and private sector involvement in this sector. The analysis is framed in the “policy roadmap” developed by regulatory economics and discusses opportunities for competition in the market, unbundling, competition for the market and yardstick competition. A review of studies comparing privately and publicly managed water utilities is finally provided.Water supply and sewerage, liberalization, private sector involvement, water infrastructure, economic regulation

Agriculture, Water Resources and Water Policies in Italy

This paper provides an overview of the Italian water management system, with particular reference to the links between agriculture and water resources, and emphasis on underground resources. Our objective is mainly descriptive at this level; nonetheless, we try to evaluate patterns of interaction between agriculture and water resources policy from the point of view of water sustainability. After a short description of the main hydrologic and institutional aspects, the paper goes into the analysis of the most important issues and ongoing policies. We show that the link between agriculture and groundwater is but very weak in "Mediterranean" Italy. While most of the pollution problems regard Northern Italy - that resembles much more continental Europe than Mediterranean countries with respect to hydrologic and climatic patterns - the use of the water table for irrigation is restricted to only a few areas, since most of the agricultural water is derived from surface resources. On the other side, agriculture remains by far the largest water user in Italy, and one of the primary causes of pollution.Water Policy; Environmental Impact of Agriculture; Groundwater Protection; Environmental Policy Instruments

Water in climate change

WATER IN CLIMATE CHANGE Water in climate change / Massarutto, Antonio (Rights reserved) ( -

Rent seizing and environmental concerns: a parametric valuation of the italian hydropower sector

This paper is the first attempt to estimate the hydroelectricity rent in Italy, as several concessions are about to expire, and the first to analyze the implications of different redistribution mechanisms. Due to budgetary constraints, local authorities want to capture a higher part of the rent, thought to be considerable. At the same time, the renewal procedure entails the implementation of environmental mitigation measures, as set forth in the water framework directive. Hence, rent-seizing and environmental protection generate a major trade-off. We focus our analysis on the County of Sondrio, home to 18% of the overall hydropower capacity, where the first renewals will take place. We obtain the highest rent ever estimated for hydropower production, averaging from 30.3. \u20ac/MWh to 82.4. \u20ac/MWh. These high values explain why local authorities are pushing for the introduction of a 30% revenue sharing fee, as they would earn almost 90% of the rent, much more than the 50% currently seized. Albeit satisfying the rent-seizing objective, the proposed fee hinders the implementation of costly mitigation measures. In this paper, we advocate the adoption of a resource rent tax, as we show that it would reduce the trade-off between rent-seizing and environmental protection

El precio del agua: ¿herramienta básica para una política sostenible del agua?

[ES] La reciente legislación europea adopta el concepto de la recuperación completa de costes (RCC) como directriz para la tarifación del servicio de agua. En este artículo, se analiza el concepto de RCC al tiempo que se aborda la razón económica de su aplicación desde diferentes perspectivas. La idea básica aquí desarrollada es que se trata de un concepto un tanto confuso, ya que los costes se recuperan por definición, estando por tanto el verdadero problema en evaluar cómose recuperan. Después de presentar diversas opciones disponibles para tratar los subsidios cruzados, se propone un marco contable para analizar la estructura de la recuperación de los costes del servicio de agua. También se incluyen otras formas alternativas de financiación del servicio, según la distancia que las separa con el puro coste marginal a largo plazo. En cualquier caso y aunque se trate normalmente de una solución irrealizable en la práctica, este último siempre representa el óptimo teórico.Massarutto, A. (2003). El precio del agua: ¿herramienta básica para una política sostenible del agua?. Ingeniería del agua. 10(3):293-326. https://doi.org/10.4995/ia.2003.2587OJS293326103Barraqué B., 1999, Environmental, economic and ethical sustainability of water service industry, in Correia F.N., Water 21: towards a sustainable European water policy, Report to the European Commission, Dg12Barraqué B., 2000a, Les demandes en eau en Catalogne: perspective europeene sur le projet d'aqueduc du Rhone a Barcelone, Report to the French Ministry of the Environment, ParisBarraqué B., 2000b, Privatising the water sector: the French experience, in Holwarth F., Kraemer A., Environmental consequences of privatizing the water sector in Germany, proceedings of the Conference held in Berlin, November 2000, Berlin, Ecologic.Baumol W.J., Oates W.E., 1988, The theory of environmental policy, NY, Cambridge University PressBriscoe J., 1996, Water as an economic good: the idea and what it means in practice, International Commission on Irrigation and Drainage, CairoBromley D., ed., 1996, The handbook of environmental economics, Basil Blackwell, Cambridge Ma., UsaCorreia F.N., 1999, Water 21: towards a sustainable European water policy, Final Report to the European Commission, Dg12Dalhuisen J.M., Florax R.J., de Groot H.L., Nijkamp P., 2001, Price and income elasticities of residential wáter demand, Discussion Paper TI 2001-057/3, Tinbergen Institute, Amsterdam (http://www.tinbergen.nl)de Carli A., Massarutto A., Paccagnan V., 2003, "Water sustainability: concepts, indicators and the Italian experience", Economia delle Fonti di Energia e dell'Ambiente, forthcomingDinar A. 2000. The political economy of water pricing reforms. Oxford University Press: Oxford, UKEkins P, 2000, Economic growth and environmental sustainability, Routledge, LondonEuropean Commission, Dg Environment, 2000, A Study on the Economic Valuation of Environmental Externalities from Landfill Disposal and Incineration of Waste, Bruxelles, URL: http://europa.eu.int/comm/environment/enveco/studies2.htm#28European Commission, Dg Environment, 2000, Pricing policies for sustainble management of water resources, COM (2000) 477 final, BrusselsEuropean Commission, Dg Environment, 2001, Sixth Framework Programme for Environmental Protection, Bruxelles; URL:http://www.europa.eu.int/comm/enviRonmentFarber S.C., Costanza R., Wilson M., 2002, "Economic and ecological concepts for valuing ecosystem services", Ecological Economics, n. 41, 375-392Faucheaux S., M.O'Connor, J.van der Straaten (eds.), 1998, Sustainable Development: Concept, Rationalities and Strategies, Kluwer, Amsterdam.Faucheaux S., O'Connor M., 1998, Valuation for Sustainable Development: Methods and Policy Indicators, Edward Elgar Publisher, 1998Florio M., 1991, La valutazione dei progetti pubblici, il Mulino, BolognaFontana M., Massarutto A., 1995, La valutazione económica della domanda di acqua: metodologie di stima e applicazioni empiriche, Quaderni di ricerca Iefe, Università Bocconi, MilanoGarrido, A 1999. "Pricing for Water Use in the Agricultural Sector," in European Commission DGXI and Instituto da Água, Pricing Water: Economics, Environment and Society: Sintra.Gibbons D.C., 1986, The Economic value of Water, Resource for the Future, Washington DCGreen C., 2003, A Handbook of the Economics of Water, Wiley (forthcoming)IVM - EFTEC, 1998, External economic benefits and costs of water and solid waste investments, Report R98/11, Vrije Universiteit, AmsterdamMassarutto A., 2001a, Water pricing, the Common agricultural policy and irrigation water use, Report to the European Commission, Dg Environment. URL: http://www.europa.eu.int/comm/dg11Massarutto A., 2001b, Liberalisation and privatisation in environmental utilities in the international experience, XIII SIEP Conference, Pavia, 5-6 ottobreMassarutto A., 2002a, "Water pricing and irrigation water demand: efficiency vs. sustainability", European Environment, forthcomingMassarutto A., 2002b, Environmental, economic and ethical sustainability of the water industry: a case-study from Italy, Working paper Series in Economics, 03-02, Dipartimento di scienze economiche, Università di UdineMassarutto A., 2002c, Regulation and institutions of wáter management in Italy, Working paper series in economics 02_, Dipartimento di scienze economiche, università di Udine (http://web.uniud.it/dse/)McMahon P., Postle M., 2000, "Environmental valuation and water resources planning in England and Wales", Water policy, n.2, pp. 397-421Merrett S., 1997, Introduction to the economics of water resources: an international perspective, London, UCL PressMerrett S., 2002, "Deconstructing households' willingness to pay for water in low-income countries", Water Policy, n. 4, 157-172O'Connor M. (ed), 2003, GOUVERNe Final Report, European Commission Dg12, Bruxelles.OECD, 1987, Pricing of water services, ParisOECD, 1997, Evaluating Economic Instruments for Environmental Policy, ParisOECD, 2000, The price of water: trends in the Oecd countries, ParisPearce D., 1999, Water pricing: investigating conceptual and theoretical issues, Proceedings of the Conference "Pricing Water: economics, environment and society", Sintra, 6-7 SeptemberPearce D.W., Turner R.K., 1989, Economics of natural resources and the environment, Harvester-Weatsheaf, LondonRees J., 1998, "Regulation and private participation in the water and sanitation services", Natural Resources Forum, vol,22 n.2 pp. 95-105Rogers P., Bhatia R., Huber A., 1998, "Water as a social and economic good: how to put principles into practice", Global Water Partnership background Paper n.2, Stockholm, (http://www.gwpforum.org/gwp/library/Tac2.pdf)Rogers P., de Silva R., Bhatia R., 2002, "Water as an economic good: how to use prices to promote eq-uity, efficiency and sustainability", Water Policy, n.4, 1-17Sen A., 1982, Choice, welfare and measurement, Oxford, Basil BlackwellSpulber N., Sabbaghi A., 1994, Economics of water resources: from regulation to privatization, Kluwer Academic Publishers, DordrechtStiglitz J.E., 1988, Economics of the public sector, McGraw Hill, New YorkTardieu H., Préfol B., 2002, Full cost or sustainability cost pricing in irrigated agriculture: charging for water can be effective, but is it sufficient?, Irrigation and Drainage, vol. 51, 97-107The World Bank, 1993, Water Resources Management, The World Bank, Washington DC, USATurner R. K., Postle M, 1994, Valuing the water environment: an economic perspective, mimeo, CSERGE, University of East Anglia, Norwich, GBTurner R.K., 1993, Sustainable environmental economics and management, London, Belhaven PressVergés J.C., 2002a, El saqueo del agua en España, Barcelona, La Tempestad.Vergés J.C., 2002b, The two-headed Ebro Hydrodinasaur, World Bank Water Forum 2002, Washington DC, 6-8 May 200

Top-down Standards versus Bottom-up Learning Processes

Wie das Beispiel Hausmüllpolitik zeigt, ist die Ähnlichkeit der Umweltpolitiken in Europa oft nur oberflächlich; in der Praxis bestimmen weiterhin nationale Unterschiede das Bild. Hieran ändert auch eine von der EU "von oben" beschlossene Harmonisierung der Standards wenig, solange der für die Umsetzung zentrale Implementationsprozeß weiterhin national kontrolliert wird. Für eine erfolgreiche Weiterentwicklung der Politik muß daher diese "black box" geöffnet werden. Insbesondere ist eine genaue Analyse der Akteure und ihrer Interaktion notwendig. Dabei zeigt sich, daß die Diversität der nationalen Lösungen auch Vorzüge mit sich bringt, die nur genutzt werden können, wenn die Koordination der Politiken den Spielraum der lokalen Akteure berücksichtigt

Liberalization and private sector involvement in the water industry: a review of the economic literature

The theoretical and empirical literature on water supply and sewerage liberalization is reviewed in this paper in order to discuss the potential for market creation and private sector involvement in this sector. The analysis is framed in the “policy roadmap” developed by regulatory economics and discusses opportunities for competition in the market, unbundling, competition for the market and yardstick competition. A review of studies comparing privately and publicly managed water utilities is finally provided

Liberalization and private sector involvement in the water industry: a review of the economic literature

The theoretical and empirical literature on water supply and sewerage liberalization is reviewed in this paper in order to discuss the potential for market creation and private sector involvement in this sector. The analysis is framed in the “policy roadmap” developed by regulatory economics and discusses opportunities for competition in the market, unbundling, competition for the market and yardstick competition. A review of studies comparing privately and publicly managed water utilities is finally provided

Organizzazione e regolazione del settore idrico: un'analisi comparata delle esperienze internazionali

Dal confronto delle esperienze internazionali si deriva che il problema del settore idrico non è liberalizzare per fare diminuire i prezzi (che sono semmai troppo bassi), ma trovare sul mercato le risorse finanziarie per investimenti di manutenzione straordinaria, rimpiazzo ed estensione delle reti. Il settore ha “bisogno di privato” e la concorrenza permette di governarlo meglio

External Costs of Transportation. Case Study: Maritime Transport

A sustainable transport system needs a cost accounting and full cost-pricing systems reflecting economic factors which originate from transport activity inhibiting sustainable development (namely, externalities; spillover effects and non-priced inter-sectorial linkages; public goods; uncompetitive markets; myopic planning horizons and high discount rates; risk and uncertainty, irreversibility and policy failures) (Panaytou, 1992). The evaluation of the impacts of transport enables policy analysis to formulate tools to avoid, reduce or compensate such costs, as well as to make optimal trade-off between environmental protection and other economic and social objectives (Quinet, 2003). In particular, there is a consensus that environmental effects (externalities) should be included in the assessment of projects and policies in order to define effective policy instruments for dealing with pollution entailed by transport. This report defines a comprehensive framework for the assessment of maritime external costs that has been chosen as case study. In order to do so, this report is organized in two sections: (i) identification of all environmental impacts of maritime transport (at sea and in ports) and a detailed analysis for those already studied in previous researches in literature; (ii)Estimation of identified environmental impacts focusing on those related to air pollutants.JRC.H.4-Transport and air qualit