Dr. E. Esteban (Centro Universitario de la Defensa) & Dr. J. Albiac (Agrifood Research and Technology Center)

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1 Dr. E. Esteban (Centro Universitario de la Defensa) & Dr. J. Albiac (Agrifood Research and Technology Center) Fertilisers used in agriculture, such as in this winery in the Rioja region of Spain, are a leading contributor to nonpoint source water pollution This article summarises some of the principal water quality problems in European water bodies. Regardless of the efforts to protect and reduce water degradation, the damages sustained by European water bodies are still quite significant. In order to resolve this problem, we argue that water pollution policies should incentivise collective action and support the creation of the necessary institutional setting instead of solely using economic instruments. Water quality issues: Agricultural nonpoint pollution Water resources are subjected to growing quantitative and qualitative pressures from urban, industrial, and agricultural uses. Agriculture generates significant pressures on water resources and it has significantly changed the natural environment for centuries. The development of intensive agriculture in recent decades has had several drawbacks, such as emissions of nutrients and pesticides that degrade natural ecosystems. These emissions from agriculture not only affect ecosystems but also downstream human activities in farms, urban centers, and industries. Emission loads from agriculture into water bodies are characterized by being nonpoint pollution at the source. This type of pollution is linked to an important problem of information and knowledge because of the impossibility of identifying the agent generating the emissions, the spatial location, and the amount of emission loads at the source. These Global Water Forum 1

2 problems explain the difficulties in the design and implementation of policies to control nonpoint pollution 1,2,3. Most of the current European pollution policies consist of using economic instruments to compensate the private benefits of agents causing pollution damages, or use public funds in financing investments in pollution abatement technologies. These policies appear to be ineffective in curtailing the large nonpoint pollution loads in river basins around the world. What might be more useful is the cooperation of stakeholders managing the water resources. The economic argument supporting this collective action approach is that water resources are mostly common-pool resources, thereby requiring cooperation rather than just economic instruments that are harder to implement in the case of public goods 4. Water nonpoint pollution problems in Europe The analysis of water quality is an important issue in Europe given the large degradation of river basins in recent decades. The policy efforts to curb pollution have been considerable but results appear disappointing. The main European regulations include the Urban Wastewater Treatment Directive and the Nitrates Directives, both of 1991, and the Water Framework Directive of The huge investments resulting from the Wastewater Directive which included investments in excess of 100 billion, should have reduced pollution in European water bodies. However, the European data for the past 15 years on nitrate concentration indicate only a slight reduction in Agricultural water pollution in Oxfordshire, England Global Water Forum 2

3 rivers and a large increase in aquifers 5. Data from the Organisation for Economic Cooperation and Development 6 also found that most major European rivers show no abatement of nitrates, and some have even grown worse. The Nitrates Directive of 1991 was based initially on information and voluntary compliance; more recently farmers have been required to keep a nitrogen balance book. Uncomplying farmers drawn by chance are penalised through their Common Agricultural Policy payments. The Nitrates Directive applies to cultivation over aquifers declared officially polluted. However, the Directive ignores cultivation over whole basins and highly polluting crops that are not receiving subsidies, such as greenhouses. The Water Framework Directive of 2000 relies heavily on economic instruments to achieve the sustainable management of water resources. Water pricing and full recovery costs are advanced as key policy measures. However, these water-based instruments to abate pollution do not seem to be good enough to curb nitrate pollution since the pollution driver is fertilizer rather than water. The quality parameters of the main European rivers show modest or no improvements despite the large investments in urban wastewater plants in recent decades (Figure 1). There are high nutrient loads in the Guadalquivir, Thames, Seine and Scheldt rivers, and high concentrations of heavy metals in the Seine, Scheldt, Tagus, Guadalquivir and Porsuk rivers 6. It seems that water quality is improving very slowly in Europe. An important reduction in pollution should have been achieved in the loads of organic matter, nitrogen and phosphorus because of the urban wastewater treatment plants, and a reduction Global Water Forum 3

4 Figure 1. Nitrate (mg/l NO3-N, 2008) and Phosphorus (mg/l PO4-P, 2008) concentration by basin in Europe. Source: EEA (2011) of heavy metals and chemical substances from industries. The OECD 6 data show the acute quality deficiencies in European rivers during the last thirty years, which have prevented their ecological recovery. In the beginning of the 2000s the biochemical oxygen demand improved in the majority of European countries. However, pollution by nutrients has not improved in the majority of European countries, and has even worsened in some cases. Information on heavy metals is very scarce, and the few available data indicate some reduction in several countries by the end of the 1990s. Final considerations A key element in pollution policies is the promotion of cooperation between all stakeholders. Cooperation between water users is a necessary condition to achieve sustainable management of water resources. Current policies consist of compensating interventions using market instruments for the private benefits of individual farmers who cause the damages. These policies are not efficient and quite expensive to implement because of the information problems and the strategic behavior of stakeholders. Collective action approaches achieve higher efficiency levels and require less information. This is the argument supported by Byström and Bromley 7, who propose economic incentives that promote cooperation between farmers to solve nonpoint pollution problems. The use of conventional economic instruments to control water quality deterioration is not achieving good results. Successful policies to reduce emission loads should involve the cooperation among farmers, because of the lack of information on pollution at the source and on the transport and fate processes. Under cooperation farmers would reveal the information Global Water Forum 4

5 required to achieve optimum abatement levels. Institutions should play an essential role to promote this cooperation and create the rules of enforcement among farmers. The current pollution policies based on economic instruments should be changed towards efforts nurturing stakeholders collective action and the necessary institutional setting. References: 1. Shortle, J. & Horan, R. (2001) The economics of nonpoint pollution control. Journal of Economic Surveys, 15(3), pp Tomasi, T., Segerson, K. & Branden, J. (1994) Issues in the design of incentives schemes for nonpoint pollution control. In C. Dosi and T. Tomasi (Ed), Nonpoint Source Pollution Regulation: Issues and Analysis. Kluwer Academic Publishers. Dordrecht. 3. Weersink, A., Livernois, J., Shogren, J. & Shortle, J. (1998) Economic instruments and environmental policy in agriculture. Canadian Public Policy 24 (3), pp Albiac, J. (2009) Nutrient imbalances: pollution remains. Science, 326 (5953), pp European Environmental Agency. (2009) Progress towards the European 2010 biodiversity target. EEA. Copenhagen. 6. Organization for Economic Co-operation and Development. (2008) OECD Environmental Data. Compendium OECD. Paris. European Environment Agency. (2011) Water Data Center. EEA. Copenhagen. 7. Byström, O. & Bromley, D. N. (1998) Contracting for nonpoint-source pollution abatement. Journal of Agricultural and Resource Economics, 23 (1), pp Dr. Encarna Esteban is an assistant professor in the Centro Universitario de la Defensa (University of Zaragoza, Spain). Her work includes environmental economics, natural resources, mathematical optimization, simulation and modeling applied to water problems. Dr. José Albiac is a researcher at the Agrifood Research and Technology Center (CITA- Government of Aragon) in Saragossa, Spain. His research specializes in environmental and natural resource economics and policies, water management, nonpoint pollution, and climate change. The article is based on an original piece of research published in the International Global Water Forum 5

6 Journal of Water Resource Development, vol. 28(1): Assessment of Nonpoint Pollution Instruments: The Case of Spanish Agriculture by Encarna Esteban and José Albiac. The views expressed in this article belong to the individual authors and do not represent the views of the Global Water Forum, the UNESCO Chair in Water Economics and Transboundary Water Governance, UNESCO, the Australian National University, or any of the institutions to which the authors are associated. Please see the Global Water Forum terms and conditions here. Global Water Forum 6