Economic Instruments for Water Management

Economic Instruments for Water Management

The Cases of France, Mexico and Brazil

Ronaldo Seroa da Motta, Alban Thomas, Lillian Saade Hazin, Jose Gustavo Feres, Céline Nauges and Antonio Saade Hazin

This book argues that the economic appeal of using water charges to promote efficiency in usage and pollution control can be constrained by institutional and operational problems. Analysing the cases of France, Mexico and Brazil, the authors – respective local experts – illustrate that barriers are similar despite the existing differences among these economies.

Chapter 5: Country Case: Brazil

Jose Gustavo Feres and Ronaldo Seroa da Motta

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


1 José Gustavo Feres and Ronaldo Seroa da Motta 5.1 POLICY ANALYSIS PHASE2 This section presents an overview of water policies in Brazil. It first analyses the previous legal and institutional frameworks and then describes the development of the new water management policy under which the use of water charges in Brazil was introduced. 5.1.1 An Overview of Water Management in Brazil The first water regulation in Brazil was the 1934 Water Code. At the time it was a very advanced regulation in determining multiple water uses, although it was mostly related to quantity aspects to accommodate agricultural, urban and energy uses. It also created the water permits issued to assign individual water volumes and introduced the distinction between federal and state rivers. Federal waters are those that flow across or along the boundaries between two or more states or a foreign country. State waters are those situated entirely within the territory of a single state. This discrimination may sound too complicated, but it is, in fact, an option to deal with water resources in a country of Brazil’s size and hydrological complexity and abundance. The code also created an institutional arrangement led by the National Department of Water and Electric Energy (DNAEE). States also followed the same centralized and energy-oriented structure. Direct regulation on pollution issues arose during the 1970s with the process of rapid industrialization. The first Brazilian law on pollution control was created in 1977 and included the monitoring and control of water quality. Its main concern...

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