1. Introduction. 2. Objectives

Transcription

1 1. Introduction Water is a natural resource that is scarce, irreplaceable, susceptible to alternative uses, the natural medium of many ecosystems and key as a waste recipient. It constitutes an essential element for the development of economic activity, which constantly modifies its characteristics. Given the relevance of this resource, it is necessary to have at our disposal statistical data that provides information on its availability and quality, with the aim of implementing measures to satisfy demand and protect quality. In the study of water it is possible to apply two different approaches, one that is economic and the other that is environmental. From an economic point of view, water is taken into consideration when it is directly or indirectly affected, truly or potentially, by the carrying out of human activities; at that state, we speak of produced water, which provides input into the economy and forms part of the production process of all economic activities, usually with the breakdown of water use by destination in the economic system (agriculture, industry, services and households). From an environmental perspective, water is the habitat of a multitude of ecosystems and a utility resource that contributes to the well-being of society. Likewise, it is a recipient of waste that leads to a loss of quality and results in important economic and environmental costs to society. As a consequence, the implementation of a theoretical framework that allows for an integration of the economic and environmental aspects is essential for the development of political actions in the hydrographic sector. The Water Accounts comprise this theoretical framework, offering a response to most of the issues raised, and allow for the investigation and modelling of other water-related issues. 2. Objectives The objective of the Water Accounts is to determine and quantify in a structured and detailed manner the flows, quantitatively and qualitatively, that arise in the hydrological system, and their connection with the economic system. The Water Accounts constitute a satellite account within the general framework of the national economic accounts and incorporate the environmental flows within the hydrological system and between the hydrological and economic systems. This type of flows are is accounted for in physical terms. 1

2 3. Hydrological System The United Nations (1992) defines the hydrologic cycle as the succession of stages undergone by water from the atmosphere to the earth and its return to the atmosphere. The stages include evaporation from the land or sea or inland water, condensation to form clouds, precipitation, accumulation in the soil or in bodies of water, and reevaporation. The hydrological system of a territory is comprised of the atmospheric water, sea and ocean water, and surface and groundwater. Figure 1 shows the basic elements of the hydrological system of a reference territory and the transfers between its components. Precipitation constitutes the natural input of water within the reference period. The main transfer into the atmosphere takes place through evaporation and transpiration, given that precipitation partially evaporates, returning to the atmosphere. Moreover, part of the precipitation is discharged over surface water (lakes, rivers, reservoirs) to finally flow into the sea, or it filters through the soil, moistens it and passes on to form part of aquifers. Groundwater gradually returns to surface masses, turning into flows of surface currents, rivers. Plants and vegetation absorb soil humidity through the roots and release water into the atmosphere through transpiration processes. Areas of permanent snow and ice represent a large store of water in a solid state, which contributes to the flows of surface and groundwater during the thawing season. There are also natural flows stemming from other territories towards the reference territory and from the same into other territories or into the sea. 2

3 Figure 1: Summary of continental waters system flows Atmosphere Precipitation Evapo transpiration Reference territory Basins and acuifer water above the reference territory Outflows Rivers Continental water resources system Surface Run-off Natural transfers Lakes and reservoirs Basins and acuifers water below the reference territrory Outflows IInfiltration Subterrane an waters Infiltration Outfolw s Marine and brackish brackish water Capture Re tur n flo Marine and brackish water Economy 4. Scope of the study The model of the Water Accounts exclusively considers the part of the hydrological system comprised of bodies of surface and groundwater within the reference territory, denominated the continental water system, which is made up of lakes, reservoirs, rivers and aquifers. It also includes brackish water and that water resulting from the desalination of sea water. Water as a natural resource is found within the natural sphere. Once processed by an economic unit, it enters the economic sphere, where it is an input that is employed as intermediate consumption or final consumption by the productive units and the consumption units. As a result of the productive processes and final consumption, wastewater is generated, which because it is not used by the economic units, finally returns to the natural medium. 3

4 Figure 2: General description of the main water flows Atmospher f Precipitation Evapo transpiratión Reference territory ins and ifer er ve the rence tory Physical system of tiwater t resources l Basins and aquifer water below the reference territory Outflow The system of superficial continental water resources (rivers, lakes, reservoirs, etc.) and underground water resources, as well as natural flows between them Out flows Outflow s e and ackish ater in situ Use of precipitation Capture Out Flo ws Evapo transpiración Marine and brackish brackis water Capture onomy m the rld t f Imports Economy The system made up of water users -both Industries (water capture for Productive or consumption activities) and final (consumer households) including exchanges between them as well as infrastructure for water transport Return flows Exports Economy From the Of the t ld Water performs several economic and environmental functions that may be summarised in the following manner: It provides input into the Economy. It is an input that is essential for a broad spectrum of economic activities that stem from the agrarian sector all the way to the services sector. It is a recipient of waste of a very diverse nature, resulting from the productive and consumptive activity of society. It is a utility resource and affects the direct well-being of man, on both an aesthetic and a recreational level. The scope of the Accounts is exclusively restricted to the first two functions, given that these determine a change in the physical-chemical characteristics of water. 4

5 5. Preliminary approach of the Water Accounts The Integrated Environmental and Economic Accounting System (IEEA) is the model established to measure the interrelations between the economy and the environment, in that it broadens the limits of the central system of the economic accounts for the purpose of describing the flows existing between both systems, the economy and the environment. The Water Accounts are initially exclusively limited to water which, as a natural resource, is going to be managed within the economic sphere. However, for the purpose of broadening the coverage of the water removed from nature for self-supply use, there are two approaches to its handling: the first approach consists of considering the collection of water as hidden flows, flows which in reality do not enter into the economic system; the second approach consists of considering the said flows that do enter into the economic system, quantifying them as water collection and measuring return-flows into the environment as waste flows. Thus, the water used in the generation of electrical energy may be considered as water extracted and returned into the hydrological system. This second option is the one which will be considered in the present version of the Water Accounts. The satellite Water Accounts below are based on the NAMEA model and describe the flows of water within the economic system and those other flows that are generated between the economy and the environment, allowing for a more complete analysis of the different aspects of water. The NAMEA framework consists of extending a simplified matrix of the national accounts (SAM) with rows and columns recording complementary environmental information related to the economic transactions of the simplified matrix. This conceptual matrix is used by the Statistical Office of the European Communities (Eurostat). There are other official methodological approaches to establishing Water Accounts, such as the System of Environmental-Economic Accounting for Water (SEEAW) of the United Nations Statistics Division. To date (2007), collaboration work is restarting among the three interested organisations in this area of statistical research (Eurostat/UN/OECD) for the purpose of achieving an internationally agreed conceptual framework for the preparation of satellite Water Accounts that allows for establishing the appropriate recommendations and statistical norms accepted by all member countries. Some elements, in particular water flows that are produced within the natural sphere, are dealt with in the previously mentioned framework. The measurement of these flows is important for the characterisation of the water resources existing in nature. Natural flows are those that are not under the control of an economic unit, that is, that even though they may be influenced or induced by human activity, they cannot be totally controlled. As already pointed out, natural flows are the following: precipitation, influxes from other systems from internal waters (outside the reference territory), evapotranspiration, transfers between components of the hydrological system and 5

6 infiltrations. Their consideration is essential to beginning the account of natural assets and developing a model of the demand for water from its availability. Figure 3: Summary of flows within the economy Reference territory Continental water resources in the environment e and ater ish in situ Use of precipitation the Capture Capture Ret urn flo ws Capture Ret urn flo ws Ret urn flo ws CNAE 90 Collection and treat. Of waster water Evapotranspiration Return flows Marine and Brackish water Capture Household s nomy m the t of the d Imports NACE 41 Capture, filtering and distribution of water Industry (incl. Agriculture) Exports Economy From the Of the t ld Economy Leaks in the distribution network, that make up the return flows are not represented in this diagram in order to simplify things. 6. Definitions and classifications 6.1. Definitions Elements of the Hydrological System Hydrological cycle Sequence of climatological events: the heat of the sun evaporates water from the earth's surface and bodies of water, the steam then rises until reaching the colder upper layers, where it is condensed and forms clouds. A new condensation generates precipitation that falls towards the earth in the form of rain, snow, etc. Part of this water 6

7 is retained on land, and another part forms the surface runoff that returns to rivers, lakes and oceans. Hydrographic basin Total area of territory drained by a river and its tributaries, that is, the surface area of the terrain that has one sole outflow point for surface runoff. Hydraulic public domain This is comprised of the continental, surface and groundwater, continuous and discontinuous natural current basins, lake beds, lagoons, reservoirs and underground aquifers. Precipitation Total annual volume of wet precipitation (rain, snow, hail, dew and others) fallen within national territory. Evapotranspiration Total annual volume of water transferred to the atmosphere from the surface by means of evaporation and vegetable and animal transpiration. Other inflows Total volume of water that enters the territory throughout the year through ground- or surface waters, from one or more neighbouring territories. Other outflows Total volume of ground- or surface waters that exits towards one or more neighbouring territories or into the sea Water resources Surface water Continental surface waters are those that flow or which are stored on the surface, and include natural water channels such as rivers, surface runoff, streams, lakes and others, as well as artificial water channels such as irrigation channels, industrial and navigation channels, drainage systems and artificial reservoirs. Groundwater The water that is retained within an underground geological formation (aquifer) and which can normally be extracted from or through said formation. It includes all permanent and provisional water deposits, filled naturally or artificially, in amounts that are usable due to both their quality and their availability. This section includes water from springs. Other types of water resources Includes the direct collection of atmospheric precipitation, sea water, permanent bodies of stagnant water and transitional waters such as swamps, lagoons and estuaries of 7

8 brackish waters. These types of water resources have, as a general rule, less importance in relation with the continental surface and groundwater Dumping That which is carried out directly or indirectly in continental waters, as well as in the rest of the hydraulic public domain, whichever procedure or technique is used, and is classified as either direct or indirect: Direct: the direct emission of contaminants into continental waters or into any other element of the hydraulic public domain, as well as the discharge of contaminants into groundwater via injection through the soil or subsoil. Indirect: both that carried out in surface waters through drains, networks for wastewater or stormwater collection or any other means of drainage as well as that carried out in groundwater via filtration through the soil or subsoil Water-related economic activities and products Productive activities and products related with water are those that are included in the following charts: Products CPA Irrigation system operations Distributed water Drinking water Non-drinking water Water supply services Water-related administrative services Wastewater purification and treatment services Economic activities NCEA-93 (Rev. 1) 1 Irrigation system operations Collection, purification and distribution of water Water-related administrative services Wastewater treatment and sewage system activities

9 The designation of each of the products and their codes corresponds to the Classification of Products by Activity 2002 (CPA-2002), and that of the economic activities related to water and their codes corresponds to the National Classification of Economic Activities 1993 (NCEA-93 Rev.1), both published by the National Statistics Institute. Other economic activities associated with water could be proposed but only in a residual manner or as a secondary activity. The economic activities considered correspond to activities which imply an availability of water in controlled networks, so as to be able to incorporate the same as a product or which can change the physical, biological or chemical characteristics of water. Irrigation system operations, classified in group of the NCEA-93 as service activities related to agriculture, are a part of the agriculture, cattle breeding, hunting and forestry branch, and provide irrigation services ( CPA-2002) for farms through the distribution networks. Water for irrigation may also stem from units classified in division 41 through normal water pipings as drinking water ( )) or non-drinking water ( ). The abstraction,purification and distribution of water, division 41 of the NCEA-93 (Rev.1), includes the economic activities that collect water, desalinate seawater in order to obtain drinking water, and distribute the water for consumption. According to the Classification of Products by Activity CPA-2002, this activity produces three types of products, drinking water ( ), non-drinking water ( ) and water supply services ( ) that include the readings and maintenance of the water meters. Economic activity of the NCEA, treatment of wastewater and sewage, includes a complete set of transactions related to the treatment of water, whose main products are wastewater treatment services ( NCPA). Given that the majority of water service infrastructures are managed through Public Administration units, it is necessary to include the economic activity of group of the NCEA, public administration, defence and social security, for the purpose of recording the economic flows of these agents. These units produce services related with the operational systems of irrigation, water supply and wastewater treatment (Code of the NCPA-96) Flows between the economy and the environment The definitions of the flows between the economic system and the environment are closely related to the elements of the hydrological system and water resources. Water abstraction Extraction of water from any source, permanent or provisional, for its subsequent use during a given period of time. It includes both the collection of 9

10 mining and drainage waters and those destined to distribution and self-supply final use. By origin, this may be surface water or groundwater. Water supply Operation destined to the distribution of water through networks which allows to meet the consumption demands of the final users. Imports Total volume of pure water imported as a product via pipes or in vessels. Exports Total volume of pure water exported as a product via pipes or in vessels. Return-flows Amount of water that returns to the environment during a reference period. This usually contains contaminant substances, which are dumped into hydrological elements from point or surface sources. Wastewater Water that is of no further immediate value for use, due to its quality, quantity or time of appearance. However, wastewater stemming from one user can be a potential supply to a user elsewhere. Wastewater treatment Procedure applied to wastewater in order to comply with environmental norms regarding dumping, or other quality norms for its subsequent recycling or reuse by other users. Biochemical oxygen demand (BOD) Amount of dissolved oxygen required for the biological decomposition of the organic matter present in the water. This is a water quality parameter that indicates the degree of pollution or contamination by organic matter. Chemical oxygen demand (COD) Water quality index that measures the quantity of oxygen consumed by the chemical decomposition of the organic and inorganic matter present in the water. 7. NAMEA water account model The NAMEA model consists of a simplified matrix of national accounts (part A), complemented by rows and columns that describe, in physical terms, the water flows (part B), and the contaminant flows linked to economic activity and to final consumption (part C). 10

11 NAMEA framework for water A Transactions within the Economy (simplified SAM) And physical tables of the uses for the water produced B Water Return flows due to final consumption and production C Contaminants Water emissions due to final consumption and production Capture by economic activities NACE 41 Other industries Surface water Under water Sewage Balance (economic activities) Capture by economic activities (by contaminant) NACE 90 Surface water Under water Sewage Balance (economic activities) D Natural flows and accumulation From the atmosphere to From the ground to the From other systems Transfers between components Natural resources For other Systems Balance: natural flow Precipitation Evapo-transpiration Natural inflows Natural outflows e.g. acid rain e.g. run-off General balance Monetary and physical data Only physical data The simplified matrix of national accounts is mainly formed by resource and use tables (tables 1 and 2), which record the supply and use of the water produced (distributed water). At the same time, it lays the foundations of the economic accounts corresponding to the units that distribute water and perform wastewater treatment. The flows linked to internal activities are accounted for independently. Notwithstanding, when an economic agent recycles water, the gross collection per unit of product decreases, making it possible to establish the link between the water used per unit of product and the expenditure relating to auxiliary activity. Within the environmental scope, it is essential to have available information in physical terms. It is thus necessary, in the resource and use tables, for the physical units to be presented (thousands of m 3 ). Tables 5 and 6 describe these flows, directly related with the corresponding monetary flows of tables 1 and 2. The remainder correspond to the quantitative accounts, tables 7, 8 and 9, and the qualitative accounts, tables 10, 11, 12 11

12 and 13. The latter are not available at present, given that they are in the preparation phase, although they will be published in upcoming periods. All the tables present the same structure, the economic activities grouped by sections of the National Classification of Economic Activities, from A to R, appear in the rows. Sections C and D are broken down into subsections, CA and CB, and DA to DN. The statistical, economic and/or environmental transactions related with the economic or environmental flow to be measured, appear in the columns. Table 1: Water supply and wastewater treatment It presents, in monetary terms, the resources related to the supply of water and the treatment of wastewater: production valued at basic prices, taxes and subsidies on the products of the economic activities pertaining to irrigation, water collection, purification and distribution services, water-related administrative services and wastewater collection and treatment. When imports exist, they may accounted for. This table is the monetary-term equivalent of table 5, which is expressed in physical terms. Only the water supply that implies a monetary transaction between two economic units is registered in this table. The production related with the self-supply of water and the auxiliary treatment activities (purification) of wastewater may be reflected according to the NAMEA methodology in table 4. Table 2: Water use and wastewater treatment It records, in monetary terms, intermediate consumption by economic activity according to the NACE-93 and final consumption (households and public administrations), valued at market prices, of irrigation, water distribution and waterrelated administrative services and wastewater purification and treatment. This table is the monetary-term equivalent of table 6, which is expressed in physical terms. Exports and stock variation may also be accounted for, when they are significant, yielding the total uses as the final result. Uses and resources must be balanced. The aforementioned exceptions for table 1 in terms of the auxiliary services of water self-supply and wastewater purification also apply to this table. Table 3: Economic accounts They are comprised of the production and operations accounts of the ESA-95, for each of the economic activity branches related with water, including supplementary information on the gross formation of fixed capital and employment. They do not include the self-supply of water or the auxiliary services related with wastewater purification, granted that although these auxiliary activities increase production (by 12

13 increasing intermediate consumption) they do not produce change in the added value of the branch of economic activity in which they render services. The focus that has been used in these tables is that of a homogeneous branch, which is already incorporated in the INE survey on water supply and treatment. That is, the tables reflect the production value and costs associated with the said value corresponding to the products that are characteristic of sections 41 and of the NCEA-93 Rev.1, independently of who carries out the production. Table 4: Expenditure on environmental protection This table consists of two sub-tables, one referring to the expenditure and the auxiliary activities regarding wastewater collection and treatment, and the other referring to the expenditure incurred in the self-supply of water. The auxiliary activities are valued at the cost of the factors that comprise their production. Current and capital expenditures carried out by the economic units in auxiliary wastewater treatment activities are considered. Current expenditures include intermediate consumption, employee remuneration and net taxes after subsidies for production related with these activities; capital expenditure, the gross formation of fixed capital. Households may also incur in environmental expenditure when assuming the costs of septic tanks or the dumping of wastewater in rural areas. Regarding the self-supply of water, this can be carried out by industry (self-collection) for intermediate consumption in the production process or for cooling. Households may also collect water for their own use, this preferably being groundwater, as these quantities are not significant when compared with the aforementioned amounts. This version of the Water Accounts has only prepared the first of the two aforementioned tables, given that the preparation of the table regarding the self-supply of water is still under study, in accordance with the recomendations of the Environmental Water Account System of the United Nations. Table 5: Water supply and wastewater treatment This table is the equivalent, in physical terms (thousands of m 3 ), of table 1, and also specifies the quantity of water arising from the desalting and the reuse of the total water distributed. It is worth noting that the magnitudes of branch "wastewater treatment and sewage system activities" are not physical quantities of wastewater produced by this branch, but rather those used by the said branch for purification, creating the "wastewater purification and treatment services" product. Not considered are transactions that are purely monetary, and the services related with water have been transferred into physical flows. For the purpose of maintaining coherence with the economic flows, only those which are the object of economic transactions are considered, with the sole exception of the self-supply of water in 13

14 agriculture, which appears in this table to prove the distinction between those farms that are associated with irrigation communities and those that are not. Table 6: Water use and wastewater treatment This table is a replica of table 2, in physical terms (thousands of m 3 ). As in the previous case, only physical flows of water implying economic transactions are considered, with the exception mentioned in the previous section. The magnitudes corresponding to the "wastewater treatment and sewage system activities" product that the different branches use do not correspond to the wastewater used by said branches, but rather to that which is produced by them, thus requiring the use of the "wastewater purification and treatment services" product to that effect. Resources and the use of physical water flows must be equivalent, as are the economic flows. Table 7: Water collection by type of source and use It describes water flows from the environment into the economic system, total water collection, in physical units (thousands of m 3 ), and it includes the water collection that is not to be used, such as mining and drainage water, given that it is mobilised by an economic agent, even though it is not used in the production process. Self-collection of water from the environment by farms, industry and households must be reflected in this table. Table 8: Water return-flows by type This presents, in physical terms (thousands of m 3 ), the water flows from the economic system to the environment, that is, the return-flows of water, which include the wastewater from the sewage system, the wastewater directly dumped by producing units and households, and cooling water. In the wastewater purification services section, stormwater is included, granted that it is excluded from the said section of table 6, which only considers wastewater produced by the user (industry and households). The flows recorded in tables 5 and 6 correspond to the final stage of the water supply process (outgoing water), and the initial stage of the wastewater collection and treatment system. In contrast, tables 7 and 8 describe the beginning of the water supply process (collection of water from the environment for the purpose of purifying and distributing it: ingoing water), and the end of the process corresponding to the collection and wastewater treatment system (final dumping into the environment). 14

15 Table 9: Balance of continental water flows between the economy and the environment It describes, in physical terms (thousands of m 3 ), all the continental water flows, from collection until their return into the environment, and allows for the computation of the water consumption of the economic system. The account model distinguishes, within consumption, the quantity corresponding to the evaporation in the distribution networks, and the water content in the products; however, for the moment, in has not been possible to include this data, due to the lack of corresponding information. Due to its conceptual relevance, and for the better comprehension of the Water Accounts herein, we should indicate that the phrase "water consumption" that appears in this table refers to the amount of water that, after use, does not return to the environment (continental or sea waters). This concept is different from that of "water use" (referred to in table 6), which is water received by industry or households to be utilised in the uses inherent to the same. From the above, we may infer that the physical consumption of water is imputed to the branch that collects the said amount of water. A negative physical consumption indicates that the said branch returns a greater amount of water to the environment than the amount that it takes from the environment. Thus, the term "water consumption" employed in the Water Accounts has, to put it descriptively, a hydrological focus, and might lead to misunderstandings, granted that in the traditional National Accounts, the terms "consumption" and "use" are often used as synonyms. In the present Water Accounts, the tables regarding water quality (numbers 10, 11, 12 and 13) have not initially been prepared, given that their preparation remains under study for the second stage of the preparation of the Water Accounts. Notwithstanding, their theoretical content is broken down below. Table 10: Quality of the water collection for self-supply. Tables 10, 11, 12 and 13 correspond to chart C of the NAMEA model. Table 10 records the quantity of pollutants in the water collected for self-supply by the different economic activities. The measurement unit is kilograms per day. The parameters recorded are BOD 5, COD, solids in suspension, heavy metals, phosphorus and nitrogen. The comparison of the values obtained in this table with those of the following tables allows us to calculate the net pollutant load of wastewater, that is, the pollutants dumped into the medium that are the direct result of human activity, given that those present in the water upon collection would be disregarded. Table 11: Pollutants dumped into the sewage network It presents the quantity of pollutants found in wastewater dumped into the sewage network. The measurement unit is kilograms per day of dumping. 15

16 Table 12: Pollutants dumped directly into the environment It registers the pollutants stemming from the direct dumping into the environment of cooling water and wastewater, both treated and untreated, after use, by economic activity sector. Table 13: Pollutants dumped directly into non-continental waters. This table records the pollutants dumped into non-continental media (into the sea) that stem from cooling waters and from wastewater treatment, after use, by economic activity sector. The resulting values from subtracting table 13 from 12 correspond to the dumping of pollutants into the continental water system. 8. Legal regulations 8.1. Legal framework Article of the Constitution reserves for the State the exclusive competency as regards legislation, planning and concession of hydraulic resources and exploitation when the water flows through more than one Autonomous Community (intercommunity basins), in that in accordance with that which is set out in article , the Autonomous Communities may take on operation competencies for projects, construction and management of the hydraulic exploitations, channels and irrigation of interest to them. In the intra-community basins (Balearic islands, País Vasco, coast of Galicia, Canarias, internal basins of Cataluña and Mediterranean basins of Andalucía), the Autonomous competencies allow for legislation on the exploitation of public water, granting the State legislation on this issue an additional nature. The Water Law (1985) is a basic, State regulatory text on the issue at hand. Upon its entry into force, all water is considered to be public, and so long as its use is not included in article 52 (stormwater or groundwater on one's land for a collection of up to 7,000 m 3 per year) and requires administrative concession. Subsequently, the Rewritten Text of the Water Law (2001) and the Coast Law (1988) established, among other measures, the requirement of prior authorisation for those activities susceptible to causing the contamination of the hydraulic or the maritime-land public domain. Despite the obligation to control and purify urban dumping, the strongest impulse in this activity is observed in the enactment of Community Directive 91/27 (Water Framework Directive), relating to urban wastewater treatment. This legal norm requires all Member States to operate purifying facilities in accordance with three temporary scenarios (1998, 2000, 2005), which obliges them to make considerable technical and financial efforts. In order to comply with these requirements, in 1995, the Ministry of the Environment approved the National Sewage and Wastewater Purification Plan for the period

17 8.2. The Water Framework Directive The Water Framework Directive was passed by the decision of the European Parliament and Council on 23 October 2000, thus establishing a Community framework for action in the water policy area. Its fifth article requires for each Member State to carry out an economic analysis of water use in each hydrographic demarcation (basin). Annex III of the Directive provides a detailed explanation of the information that the said report must collect and may synthesize in the following points: The relevant calculations necessaries to consider in accordance with article 9, ther principle of the recovery of the costs of water related services The forecast of the volume, prices and costs associated with the said services. The forecast of the corresponding investments. The aforementioned ninth article establishes the principle of the recovery of the costs of water-related services, including environmental costs and those relating to the resources considering the analysis carried out in accordance with the said Annex III, and in particular, according to the polluter pays principle. More specifically, Member States must guarantee that, by the year 2010, the water price policy will provide sufficient incentives for users to use water resources efficiently. To this end, the economic analysis that sustains the said policies must perform a study that is adequate for the different uses of water, broken down at the very least into households, industry, agriculture and services. The transfer of the Water Framework Directive to Spanish law took place through Law 62/2003 concerning Fiscal, Administrative and Social Measures, accompanying the 2004 General State Budgets. Along the lines of these new legal obligations from community regulations, in Spain, a public debate has arisen on water costs and on whether or not they reflect the service provision costs. As a result of this problem, the pressing need has developed to increase and improve the statistical information that sustains and increases the economic information that the Framework Directive requires. Thus, from the beginning of the year 2007, the Ministry of the Environment has started to publish a series of working documents on the prices and costs of water services. It is therefore not surprising that one of the objectives of the National Irrigation Plan is the modernisation and new installation of measurement equipment that allows for quantifying the water discharge used in irrigation agriculture. 17

18 9. Satellite Water Accounts 9.1. Introduction One of the first steps towards implementing a study of a satellite accounts system within the framework of the National Accounts consists of the definition of the productive units that comprise the accounting subsystem described as well as their most relevant features. Prior to beginning the description of these units, it is important to indicate that in Spain, the provision of the integral water cycle services (water collection, purification and distribution; wastewater collection and purification) is characterised by the participation of numerous public and private agents. We must also point out the importance of other agents who intervene in the financing or the direct construction of infrastructures for water service provision. The role of the Autonomous Communities can be observed through their different Boards, and through the Ministries of the Environment and Agriculture, Fishing and Food. The institutional framework therefore has a complex structure, counting on the presence of important financial flows Productive units Irrigation Communities Article 73 of the Water Law establishes that users of water and other goods from the hydraulic public domain from the same intake or concession must create a community of users. When the destination of the water is mainly irrigation, the said community is called an Irrigation Community; in other cases, the Communities will receive the name that characterises the destination of the collective exploitation. In addition, communities of users with common interests may constitute General User Communities. Irrigation Communities are considered Public Law Corporations attached to the Basin Organism (Hydrographic Confederation). They are therefore entities not attached to the Public Administration, although they are supervised by it, and with their own legal status. There is no public financing, but rather, the expenditures of the these Communities, as well as the taxes and water rates, are paid by the associates of the said Communities, generally known as comuneros. Nonetheless, it might be appropriate to indicate that the Public Administrations make investments in systems of irrigation and water distribution to operations associated with the Communities. The latter make the said investments, with or without the aid of the State, with direct or co-financed actions by the said Administrations that are usually included in the action plans or programs for the improvement or modernisation of the irrigation water distribution systems, such as those considered in the National Irrigation Plan passed by Royal Decree 339/2002, of 5 April. 18

19 Their main income are the payments made by their associates (comuneros). There are also other types of income, some linked to resource management such as the sale of water to non-agricultural users, and other atypical types that might be the result of the sale of assets or financial operations. Regarding the expense chapter, resources are used under three headings, personnel costs, maintenance costs and repair and investment in facilities. Having reached this point, it is appropriate to indicate the payment that these communities make by delegation to the Hydrographic Confederations for the tax of regulation and water utilisation tariff. This debt collection delegation is considered in article of the Rewritten Text of the Water Law, divided equally among the members the said costs for participation in the benefits or improvements produced by the construction. The Irrigation Communities are not subject to the Company Tax for the returns obtained from those activities that are inherent to them (those related to water distribution), although they must file for those returns obtained from atypical activities. They are not subject to the Economic Activities Tax either, because their activity is considered to be agricultural. Lastly, as per the Value Added Tax (VAT), they are considered to be final consumers as regards their own activities. In order to optimise costs, General Irrigation Communities may be created, for the purpose of collecting ingoing water and supplying it to the so-called Base Irrigation Communities that distribute it (outgoing) to the farms associated with them for the irrigation of their crops. Administration Bodies, Entities and companies that provide services for the abstraction, storage and transport of ingoing water In general, these services are the competency of the State Administration through the Basin and State Water Society Bodies. In the intra-community basins, the corresponding Autonomous Communities assume said competency, having created public entities to carry out their competencies concerning water (Catalan Water Agency, Autonomous Water Entity of Galicia, Basque Water Agency, Balearic Water and Environmental Quality Agency). In particular, the case of Canarias, due to the competencies held in the water management of the Inter- Island councils, where services dependent on the Autonomous Administration (General Water Directorate, Central Canary Water Foundation) function alongside entities dependent on the said local administrations (Inter-island Water Councils, Autonomous Pond Bodies). This is also the case of País Vasco, where there are companies attached to the Local Administration such as the Water Agency depending on the Diputación Foral de Álava. As regards the rest of the Autonomous Communities (Intercommunity basins) the competent bodies concerning water may also undertake, with a subsidiary nature, public works for the urban water supply. The way to undertake the management of 19

20 these competencies is not homogeneous for each of the Autonomous Communities involved. In some cases, Entities or Agencies regulated by public law have been created, and in other cases, they operate directly through the corresponding General Directorates attached to the Council that is competent in water matters or public entities (Aragonés Water Institute, Cantabria Water Company, Andaluza Water Agency, etc.). On the other hand, there are two special cases of bodies that collect and distribute wholesale water, such as the Community of the Canals of Taibilla in the Júcar and Segura Basins, and Canal de Isabel II, in the case of supplying water to Madrid. Due to its relevance from both institutional and economic perspectives, we will proceed to describe in some detail the activities of the Hydrographic Confederations and the State Water Societies. The Hydrographic Confederations are Autonomous State Institutions of a commercial nature, attached to the Ministry of the Environment, and their income and expenditure budgets are published in the General State Budgets. They carry out their economic and financial activity in two senses: in one, as Autonomous Bodies they have their own budget, and in the other, as the administrative structure of the Ministry of the Environment, they manage an investment program entrusted by the Directorate General of Water of the said Ministry. Regarding income, it is worth mentioning that income is considered in chapters 2 and 3 of their income budgets. Chapter 3 (fees, public prices and other income) - Fees for direction and inspection of works - Other fees 1. Dumping control tax The legislation regarding water indicates that dumping into the hydraulic public domain is levied with a tax dedicated to the study, control, protection and improvement of the recipient medium, which is called the dumping control tax. A large percentage of the dumping owners are the City Councils, thus a large part of the income comes from them, with the remainder coming from industrial dumping. 2. Occupation or utilisation tax This tax is levied on the occupation or utilisation of the public domain, including in this section the navigation tax, granted that this is a way of utilising it. This also includes the tax paid by companies that generate hydroelectric energy, and by those that exploit the materials of the said domain (quarrying, etc. ). 20

21 - Other incomes There are fees that are not directly attributable to water use, as they come from technical actions (reports, projects, etc.). or income from surcharges or fines. Chapter 5 (patrimonial incomes) This income is described as the result of commercial operations, and its main components are the regulation tax and the water utilisation tariff. 1. Regulation tax The objects of this tax are the improvements produced by the regulation of the water discharge for irrigation, supply for towns, industrial exploitations or uses of facilities of any type that use the discharge that has benefited or improved as a result of said hydraulic regulation works. The persons liable for this tax are those who have benefited either directly or indirectly from the aforementioned regulation works. They can be the City Councils that, in turn, affect the consumers (households or industries) or the Irrigation Communities. This tax can also be paid directly by the industries (water collection or industrial production tax). 2. Water utilisation tax This taxation is levied on those benefiting from other specific hydraulic works (not regulation) that are totally or partially financed by the State, including the correction of the public domain derived from its utilisation, and for water availability or use. This tax is paid by the Irrigation Communities in those areas declared to be irrigation areas, by the City Councils and by companies due to the exploitation of the water for industrial or hydroelectric use. The State Water Societies are mercantile societies controlled by the State through the Directorate General for State Assets, and arise as a direct management instrument of competencies corresponding to the General State Administration in matters of hydraulic works within the scope of intercommunity basins. These societies were created under the protection of article 6.1.a of the Rewritten Text of the General Budgetary Law passed by Legislative Royal Decree 1091/1988, of 23 September. They take on ingoing water collection works and, in recent years, building and exploitation works for seawater desalination plants on the Mediterranean coast within the framework called Water Plan. Administration Bodies, Entities and companies that provide services for the purification and distribution of wholesale water, sewage and wastewater purification 21

22 According to Law 7/1985 Regulator of the Basis of Local Regimes, the distribution services of urban water (in in retail) and sewage (sewage system and wastewater purification) are municipal competencies, which indicates that the municipality must intervene in their planning. These services may be provided directly by the local authorities or through concessions to private companies or other management means considered in the legal code (public societies, municipal companies, mixed companies, etc.). The Autonomous Administration bodies competent in water matters may also cooperate with the Local Administration in the construction and improvement of the water supply in retail (to consumers directly), but in no case are they responsible for the management of the said supply. It is in sewage matters, however, where the Economic Administration has been participating most actively, since the decade of the nineties, financing investments in collection networks and in wastewater treatment stations that they operate directly or via agreements with City Councils or awarded companies. In some of them, they have even included public non-financial societies whose main objective is the sewage of wastewater and the coordination in this matter between the Autonomous and Local Administrations, such as the Regional Sewage and Wastewater Purification Entity of the Region of Murcia and the Public Wastewater Purification Entity of Comunitat Valenciana, although the latter may also carry out general infrastructure works for the purpose of general water supply. As regards the financing of urban water services, we must begin with the fact that there is a single water bill. This water tariff (supply and sewage) includes a sum of concepts of a tax nature. Given the institutional complexity of the drinking water service, billing delegation phenomena arise, with the City Council being a mere collector of economic amounts from other agents. On the other hand, the urban water supply services are subject to tariff control by the competent regulatory body of each Autonomous Community, which establishes a regime of authorised prices such that the modification of these prices requires prior administrative authorisation. We shall now examine the rate concepts for the payment of the water supply and wastewater sewage services. - Water supply fee In general, users pay a fee or price for the supply of drinking water established by the corresponding municipal order that may include other concepts such as the connection quota, meter reading, etc. If the service manager were not the local entity, the said payment would be deemed the price of the service consideration. In some small-sized City Councils, in order to reduce costs in the management of municipal bill debt collection, the water amount is included in the concept of rubbish collection. This bill, may include monetary amounts accrued for payment to other agents (billing delegations), such as the regulation tax and the water utilisation tariff charged by the 22