Costs Of Water Services Research Articles

Avoiding Punishment? Electoral Accountability for Local Fee Increases

Do voters punish incumbent legislators for raising service costs? Concern about electoral punishment is considered a leading obstacle to increasing taxes and fees to fund service provision, but empirical evidence of such backlash is surprisingly sparse. This paper examines whether voters hold local elected officials accountable for raising water service costs. Using 10 years of panel data on municipal elections and water rates in North Carolina, we find rate increases do not reduce incumbent city council members’ vote shares. Local politicians may overestimate their electoral risk from raising taxes and fees to fund public services.

Water Price: Environment Sustainability and Resource Cost

The determination of a price for water is an open discussion among related players, directly or indirectly, in water management. In the context of the recovery of water service costs, as referred to in Article 9 of the Water Framework Directive 2000/60/EC (WFD), legislation applicable in all member countries of the European Union, the total water cost is broken down into three blocks; financial, environmental, and resource. It is the last component that generates the most uncertainty both in its conceptualization and in its valuation. The need to establish a pricing system for water (water tariff) implies that the different concepts that make it up are correctly delimited. The main goal of this paper is to propose a first approximation to a new theoretical framework to establish a relationship between environmental sustainability and the valuation of the resource cost—given that current water consumption can provoke future water availability difficulties, making it a scarce commodity that resource cost must be correctly delimited. Taking into account the prospective nature of environmental sustainability, the measure of its value should be based on the use of stochastic models that reflect the associated uncertainty.

Who pays for water? Comparing life cycle costs of water services among several low, medium and high-income utilities

• Water utilities in Kenya, Ethiopia, Cambodia, and the United States are compared. • Gap between the full costs of service delivery and budgets was $7–$43 per capita. • All utilities have budget gaps from 2.6% to 10,000% • Tariffs comprise 41% of revenue in Boulder and 82–100% in the lower-income cases. • Support from national government and donors for full life cycle costs is appropriate. Universal access to safe drinking water will require an investment of over $140 billion in capital expenditures to meet the targets set by the United Nations Sustainable Development Goals. The World Bank estimates that recurring operations and maintenance costs for basic water and sanitation (WASH) services will rise from about $4 billion to over $30 billion per year by 2030, significantly outweighing capital costs for basic WASH services. Yet, available funding from regional, national and international sources regularly prioritizes capital investment in new water infrastructure, leading to significant unfunded operation and maintenance mandates for service providers operating in low-income settings where consumer payments cannot practically cover operating costs. Capital maintenance is deferred, leading to poor utility financial performance and decreased service for water customers. In this paper, we present indicative funding models, valuation of existing assets, and expenditures of four medium-sized urban water utilities in low, middle, and high-income communities representing a broad range of operating contexts. Yet we find common operating challenges. None of the four utilities are spending enough on capital maintenance to sustain service levels, and we find that the gap between the life cycle costs of water service delivery and associated revenues of water services ranges from $1 to $17 per customer each year. Discounting life cycle costs by service and coverage levels further widens the funding gap. All utilities would need additional funding to reach universal access with full coverage of life cycle costs, ranging from 6% of budgets to nearly 8 times current funding levels. This would not be economically or politically feasible through tariffs alone, which are already currently subsidized in all contexts. The contribution of progressive tax monies to subsidize services is taken for granted in high-income contexts and unavailable in poorer ones that must rely on insufficient and irregular foreign aid or national budget allocations in strained economies. These findings contrast with a commonly shared view in the global development sector that local or at minimum regional financial sustainability of water supplies is achievable. Consequently, our findings suggest that national governments and international donors should acknowledge that long term support of local water service delivery is both necessary, appropriate, and likely more cost-effective than current funding models.

Beyond Old Pipes and Ailing Budgets: Systems Thinking on Twenty-First Century Water Infrastructure in Chicago

Cities are increasingly burdened by aging water infrastructure. Deferred maintenance and upgrades are compounded by emerging concerns over contaminants, extreme weather events, demographic shifts, equity, and affordability of water services. These and other evolving twenty-first century conditions prompt changes to urban water infrastructure and related systems that have wide ranging outcomes. This work demonstrates two complementary techniques for analyzing these complex systems, through the example case of Chicago. Chicago has some of the oldest urban water infrastructure in the US and supplies drinking water to more than 5 million people. Recent efforts to improve the physical and financial components of Chicago’s water system have run into a gamut of social and environmental issues. Here, a socio-environmental systems (SES) context for Chicago’s water infrastructure is structured using a rigorous systems thinking method and visual grammar to map the SES in terms of distinctions, systems, relationships and perspectives (DSRP). DSRP maps structure information about how water flows through city and how money flows through the public utilities responsible for drinking water delivery, wastewater treatment and stormwater management. Flows are evaluated, using open data and methods, over a 23-year period (1995–2017). Overall declines in water use and wastewater production are accompanied by an increase in the costs of water services, costs that support not only water infrastructure operations, maintenance and capital improvements, but also other municipal functions. Trends in the integrated data are interpreted through iterative refinement of DSRP maps to include additional components and to consider the SES from different points of view. Findings suggest that systems thinking is important for designing urban water system upgrades that are responsive to diverse socio-environmental concerns. As changes are made, transparent, reproducible methods for tracking outcomes can support analysis of differential impacts on users. The methods applied here at the city scale may be used to better understand localized, complex issues surrounding water infrastructure upgrades in Chicago and other cities.

Affordability of Water Service from Perspective of Water Security of Community in Bekasi District

Affordability of society towards the cost of water service contributes to the selection of water source they use. Non-fulfillment of affordability aspect in accordance with the policy Regulation No. 23/2006, causing at least two things: the reduction of social welfare and security threats to the quality of water consumed by public. The affordability is calculated based on the costs used to meet water needs and family incomes. The analysis results in Bekasi show that social income of <Rp 3,000,000 both use piping and non-piping service, the burden of their monthly expenditure to meet the water needs above the standard set by the government amounted to 4% of family income. Keywords: Affordability, Water, Piping service, Non-piping service, Welfare DOI : 10.7176/JRDM/60-05 Publication date :October 31 st 2019

Opłaty za usługi wodne w rolnictwie w świetle polskiego prawa i wymagań Unii Europejskiej

Użytkowników wody można podzielić na trzy podstawowe grupy: gospodarstwa domowe, przemysł i rolnictwo. Rolnictwo wykorzystuje zwykle nieoczyszczoną wodę pobraną bezpośrednio ze źródła do nawadniania pól uprawnych. Wraz z pojawieniem się uregulowań prawnych dotyczących usług wodnych wprowadzono zasadę zwrotu ich kosztów, która dotyczy wszystkich użytkowników. Rolnictwo w zakresie poboru wody powierzchniowej do nawadniania do 2018 roku nie ponosiło żadnych opłat. Celem opracowania jest przedstawienie systemu opłat za pobór wody do celów rolniczych w Polsce w nawiązaniu do wymogów Unii Europejskiej oraz zasady zwrotu kosztów za usługi wodne.

Measuring water affordability in developed economies. The added value of a needs-based approach

In developed countries, water affordability problems remain up on the agenda as the increasing financial costs of water services can impede the realisation of an equal access to water. More than ever, public authorities that define water tariffs face the challenge of reconciling environmental and cost recovery objectives with equity and financial accessibility for all. Indicators of water affordability can be helpful in this regard. Conventional affordability indicators often rely on the actual amount that households spend on water use. In contrast, we propose a needs-based indicator that measures the risk of being unable to afford the amount of water necessary to fulfill essential needs, i.e. needs that should be fulfilled for adequate participation in society. In this paper we set forth the methodological choices inherent to constructing a needs-based affordability indicator. Using a micro-dataset on households in Flanders (Belgium), we compare its results with the outcomes of a more common actual expenses-indicator. The paper illustrates how the constructed needs-based indicator can complement existing affordability indicators, and its capacity to reveal important risk groups.

Water Quality and Willingness to Pay for Safe Drinking Water in Tala Upazila in a Coastal District of Bangladesh

This study, conducted in Tala Upazila (with > 0.3 million people) situated in a coastal district of Bangladesh, endeavors to identify the water quality situation and to assess people’s willingness to pay for safe drinking water; with a view to develop policies and programs to improve people’s access to safe and affordable drinking water in the coastal area. A total of 4500 households were surveyed for getting relevant information on willingness to pay of households, while water quality test was performed at 649 high dependent drinking water sources (basically tubewells) for identifying arsenic, salinity and iron concentration. Arsenic test results revealed that overall 36.5% of tested drinking water sources; 63% shallow tubewells and 14% deep tubewells were unsafe due to the presence of high levels of arsenic beyond Bangladesh standard. Electrical conductivity, which is a measure of salinity was very high in about 94% of the tested water sources; while 61% of tested sources had iron concentration higher than the Bangladesh standard. It is evident from the study that people are aware of these problems and on an average, 91% of the households were willing to pay for improving access to safe drinking water. Regardless of economic class, most of the households (75%) were willing to pay BDT 20.0 (0.25 USD) per week for 20 L safe water per day, which is equivalent to 2–6% of their respective monthly income to access safe drinking water. Logistic regression model identified monthly household income, tubewell ownership, distance of drinking water source, etc., as some determinants of households’ willingness to pay for safe drinking water. Encouraging peoples who are currently drinking arsenic-contaminated tubewell water to shift their sources to nearby arsenic free tubewells may be a cost-effective solution to this problem. Engaging community-based WatSan committee (a local committee comprising the user communities for supervising water and sanitation related activities) including local government representatives to design an affordable water tariff structure and generating sufficient revenue to cover the cost of water services in the community would be an effective and sustainable solution to improve access of safe and affordable drinking water in the coastal area of Bangladesh.

Water accounting for stressed river basins based on water resources management models

Water planning and the Integrated Water Resources Management (IWRM) represent the best way to help decision makers to identify and choose the most adequate alternatives among other possible ones. The System of Environmental-Economic Accounting for Water (SEEA-W) is displayed as a tool for the building of water balances in a river basin, providing a standard approach to achieve comparability of the results between different territories. The target of this paper is to present the building up of a tool that enables the combined use of hydrological models and water resources models to fill in the SEEA-W tables. At every step of the modelling chain, we are capable to build the asset accounts and the physical water supply and use tables according to SEEA-W approach along with an estimation of the water services costs. The case study is the Jucar River Basin District (RBD), located in the eastern part of the Iberian Peninsula in Spain which as in other many Mediterranean basins is currently water-stressed. To guide this work we have used PATRICAL model in combination with AQUATOOL Decision Support System (DSS). The results indicate that for the average year the total use of water in the district amounts to 15,143hm3/year, being the Total Water Renewable Water Resources 3909hm3/year. On the other hand, the water service costs in Jucar RBD amounts to 1634 million € per year at constant 2012 prices. It is noteworthy that 9% of these costs correspond to non-conventional resources, such as desalinated water, reused water and water transferred from other regions.

Editorial: China–Africa relations

This issue of Waterlines examines three very different themes: the involvement of China in the water and sanitation sector in Africa; the performance of rural water supplies delivered by handpumps; and the question of how to pay – and who should pay – for the full costs of water services.

Zasada zwrotu kosztów usług wodnych i jej znaczenie prawne

The new draft Act on Water Law provides for significant changes to the system for collecting environmental charges for water use. Their aim is, on the one hand, to eliminate the existing exemptions from the charges and, on the other hand, to increase their rates for those entities that already incur them. The changes to be introduced are justified by the need to ensure that the principle of recovery of the costs of water services, provided for in Article 9 of Directive 2000/60/EC of the European Parliament and of the Council establishing a framework for Community action in the field of water policy, is fully taken into account. Since the principle has not been extensively analysed in the Polish legal literature, the article addresses closely the directions of its interpretations presented in German science. Most of them refer to the dispute between two authors: Herwig Unnerstall and Süleyman Kolcu. In its conclusion, the provisions of the draft Act concerning this principle are assessed on a preliminary basis and the discerned legislative deficiencies are indicated.

Development of an integrated methodology for the sustainable environmental and socio-economic management of river ecosystems

The development of the Water Framework Directive aimed to establish an integrated framework of water management at European level. This framework revolves around inland surface waters, transitional waters, coastal waters and ground waters. In the process of achieving the environment and ecological objectives set from the Directive, the role of economics is put in the core of the water management. An important feature of the Directive is the recovery of total economic cost of water services by all users. The total cost of water services can be disaggregated into environmental, financial and resource costs. Another important aspect of the directive is the identification of major drivers and pressures in each River Basin District. We describe a methodology that is aiming to achieve sustainable and environmental and socioeconomic management of freshwater ecosystem services. The Ecosystem Services Approach is in the core of the suggested methodology for the implementation of a more sustainable and efficient water management. This approach consists of the following three steps: (i) socio-economic characterization of the River Basin area, (ii) assessment of the current recovery of water use cost, and (iii) identification and suggestion of appropriate programs of measures for sustainable water management over space and time. This methodology is consistent with a) the economic principles adopted explicitly by the Water Framework Directive (WFD), b) the three-step WFD implementation approach adopted in the WATECO document, c) the Ecosystem Services Approach to valuing freshwater goods and services to humans. Furthermore, we analyze how the effects of multiple stressors and socio-economic development can be quantified in the context of freshwater resources management. We also attempt to estimate the value of four ecosystem services using the benefit transfer approach for the Anglian River Basin, which showed the significance of such services.

The Effectiveness of the Principle of Recovery of the Costs of Water Services Jeopardized by the European Court of Justice – Annotations on the Judgment in C-525/12

In Case C-525/12 the European Court of Justice concludes that cost recovery for water services as outlined in Article 9 of the Water Framework Directive is only one of the instruments for Member States to strive for a rational water use. It furthermore concludes that the wfd environmental objectives not necessarily imply that cost recovery should be applicable to all water-related activities mentioned in Article 2 (38) wfd. In this underlying contribution a number of critical remarks to this judgment are provided. In view of the authors, the European Court of Justice reduces the effectivity of the cost recovery principle too rigorously by reducing the principle of cost recovery for water services to a practically voluntary tool for Member States.

Article 9 of the eu Water Framework Directive

Article 9 of the eu Water Framework Directive (wfd) requires Member States to take account of the principle of recovery of the costs of water services, including environmental and resource costs (ercs). Whilst legally the Member States have broad scope for discretion when applying Article 9, the idea that the eu legislator has effectively assigned the Member States a mathematical task to determine the level of cost recovery achieved for environmental and resource costs is increasingly gaining ground in the Common Implementation Strategy (cis) process. The present paper shows that this strict interpretation of taking account of environmental and resource costs has no basis in Article 9, is conceptually misleading, and could even prove counter-productive for the practical application of water protection.

Economía del agua y gestión de recursos hídricos

This paper presents advances in the literature related to demands, prices and costs of water services in different sectors, and the role of economic methods and models can play in the design of efficient instruments and policies for water management in the new institutional framework defined by the Water Framework Directive. It specifically deals with the contribution of Economics to water management in agriculture and urban use, and the different approaches to assess the economic value of water in the environment. This is followed by the state-of-the-art in models that integrate water supply and demand at the basin scale coupling hydrology, management and economics (hydroeconomic models), and several applications to solving water management conflicts. We conclude with an analysis of trends and future challenges in the role of models and the economic analysis in water resources management.

Financial Analysis of the Spanish Water Sector

This research gives an overview of water sector finances in Spain on a national scale. A methodology is presented which allows to estimate the total financial cost of water services and the rate of cost recovery, based on financial and budget information of administrations, agencies, companies and users’ associations involved in water resources management and water service provision. Financial records of organisations are analysed and the overall amounts of expenditure, cost and revenue determined. Cost recovery rates are calculated for different organisations and water services, and the net contribution of public funds received by the water sector in addition to tariff revenue is determined.

Recovering the Costs of Water Services in the People’s Republic of China: Lessons from Article 9 of the European Union Water Framework Directive

The cost recovery of water services is becoming known as an important element for water management internationally. The Water Framework Directive is a leading document in implementing these economic instruments in the European Union and it is also a good framework to refer to when the People's Republic of China reforms its water price policies and its recovery of the costs of water services. By providing a comparative study of the backgrounds and contents of costs recovery between Article 9 of the Water Framework Directive and the water management-related systems in the People's Republic of China, this article aims to look for some legal solutions in the European framework that can be useful for the water management of the People's Republic of China.

A Wider Notion of the Scope of Water Services in EU Water Law&lt;br&gt;Boosting Payment for Water-Related Ecosystem Services to Ensure Sustainable Water Management?

The services ecosystems on the Earth providing for mankind, like the provision of (clean) water for drinking and other purposes, are under pressure. Payment for (water-related) ecosystem services, incentive pricing policies and the recovery of service costs are instruments to attain a sustainable use of scarce environmental resources and ecosystems. Although the European Water Framework Directive (WFD), whose purpose explicitly includes striving for sustainable water use, includes an obligation to recover the costs of water services, the scope of application of this obligation depends on the width of the interpretation of 'water services' in the WFD. If 'water services' are interpreted broadly, the WFD embraces the concept of payment for water-related ecosystem services, but raises a number of questions that need to be addressed.

Water Costs Allocation in Complex Systems Using a Cooperative Game Theory Approach

The management of complex water resource systems that address water service recovery costs and consider adequate contributions and priorities require methods that integrate technical, economic, environmental, social and legal aspects into a comprehensive framework. In Europe, the Water Framework Directive (WFD) 2000/60/EC recommends that the pricing politics in a river basin take into account the cost recovery and the economic sustainability of the water use. However, the current cost allocation methods do not consider the user’s willingness to pay and often do not permit a total cost recovery. Thus, a new approach is required that includes these requirements when defining water rates. This article presents a methodology to allocate water service costs in a water resource system among different users that attempts to fulfil the WFD requirements. The methodology is based on Cooperative Game Theory (CGT) techniques and on the definition of the related characteristic function using a mathematical optimisation approach. The CGT provides the instruments that are necessary to analyse situations that require a cost-sharing rule. The CGT approach can define efficient and fair solutions that provide the appropriate incentives among the parties involved. Therefore, the water system cost allocation has been valued as a game in which it is necessary to determine the right payoff for each player that is, in this case, a water user. To apply the CGT principles in a water resources system, the characteristic function needs to be defined and evaluated using an adequate modelling approach; in this study, it is evaluated using the optimisation model WARGI. (Sechi and Zuddas 2000). The so-called “core” represents the game-solution set. It represents the area of the admissible cost allocation values from which the boundaries on the cost values for each player can be supplied. Within the core lie all of the allocations that satisfy the principles of equity, fairness, justice, efficiency and that guarantee cost recovery. The core of a cooperative game can represent a useful instrument to define the water cost rates. Furthermore, it can be used as a valid support in water resource management to achieve the economic analysis required by the WFD. The methodology was applied to a multi-reservoir and multi-demand water system in Sardinia, Italy.

Full cost recovery in the urban residential sector according to the Water Framework Directive

Full cost recovery is a major and complex issue that has gained high recognition in recent years. The Water Framework Directive promotes the idea that water charging should act as an incentive for the sustainable use of water resources. Thus, all Member States should take into consideration the principle of recovery of the total cost of water services, which includes environmental and resource costs as well. In order to evaluate various aspects of current water policy, to investigate the perspectives of water saving, to explore new approaches toward sustainable water management in the water supply sector and to evaluate water price elasticity, a survey has been performed recently in the city of Volos, concerning the residential sector. The influence of some selected variables is examined, residential water demand curve and water price elasticity are calculated. Estimations of future water demand under different pricing policies are also performed. Finally, the full water cost for the city of Volos is estimated and essential conclusions concerning water pricing and public participation are drawn.