Cost–Benefit Analysis and Water Resources Management

Cost–Benefit Analysis and Water Resources Management

Edited by Roy Brouwer and David Pearce

How are the economic values of water and water quality accounted for in policy and project appraisal? This important book gives an overview of the state-of-the-art in Cost–Benefit Analysis (CBA) in water resources management throughout Europe and North America, along with an examination of current applications.

Chapter 15: Cost–benefit Analysis, Water Scarcity and Sustainable Water Use in Spain

J. Maestu, P. Campos-Palacín and J. López-Linage

Subjects: economics and finance, environmental economics, valuation, environment, environmental economics, management natural resources, valuation, water

Extract

15. Cost–benefit analysis, water scarcity and sustainable water use in Spain J. Maestu, P. Campos-Palacín and J. López-Linage 1. INTRODUCTION This chapter presents an overview of the use and usefulness of economic analysis, in particular cost–benefit analysis (CBA), in decision-making in Spain. An attempt is made to provide a historical overview of the use of CBA, including recent developments linked to some of the major water plans in Spain. The use of CBA can be traced back to the economic development plans presented in the early 1960s, which were implemented by the Ministry of Development. Its application today is often linked to tariff setting and compliance with European funding requirements. The economic analysis required by the European Water Framework Directive (WFD), adopted in 2000, has renewed interest in the economic analysis of water use and water policy, and presents a number of challenges in relation to the conventional analyses carried out so far in Spain. The discussions surrounding the use and usefulness of economic analysis in the major water plans in Spain today provide us with helpful insights into the types of problems faced by countries with severe water scarcity. Spain has a long history of policies trying to solve water scarcity and to ensure that water supply is not a limitation for economic development. In this chapter, we furthermore address the main methodological issues, which arise when using economic analysis in Spain. It is shown that the economic analysis is embedded in a...

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