Abstract
We investigated the application of economic instruments in the management of Brazilian water resources as mechanisms to stimulate the rational use of water and to recognise its economic value. We analysed water-charge scenarios at the national and international levels as a methodology to provide an economic estimate of environmental services related to water resources. Through bibliographical and documentary research, we identified the economic instruments applied to Brazilian water-resource management, describing the methodologies and values used Brazilian water charges and in some member states of the Organization for Economic Cooperation and Development. We identified how economic valuation methods of environmental resources could contribute to the improvement of water charges, considering the environmental services offered by a healthy river basin. In the Brazilian and the international scenarios, water charge methodologies include the volumetry of abstracted or consumed water, associating some elements that indicate the pollution level. The prices per cubic meter of water are still very low in all the scenarios. Environmental valuation techniques can be an essential tool for rethinking the methodologies and costs applied in water charges, increasing the potential of water’s rational use through economic instruments.
Highlights
There are many ways to promote the equitable, efficient and sustainable use of water
We focus on the water charge in the national context, and we demonstrate the water charge panorama in other countries aiming to investigate the methods of its application
In Brazil, the water charge is classified as a public price, because a private user is authorised by a granting to explore a public good and to pay a price that is negotiated between the state and the stakeholders (Milaré, 2011)
Summary
There are many ways to promote the equitable, efficient and sustainable use of water. There are criticisms regarding the efficiency of that approach when it is compared to the use of economic instruments (Vatn, 2015; Bergquist et al, 2013; Rogers et al, 2002). In water-resource management, the use of economic strategies aims to internalise the costs of economic activity that are not covered by the market (Liao, 2018). Such costs are supported by society, as the case of pollution (Nusdeo, 2006). The use of economic instruments is seen as a complement to the command and control approach (Nascimento et al, 2010), and this interaction is described as a “mixed policy” (Begossi et al, 2011)
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