WATER DEMAND MANAGEMENT IN DENMARK: A NORDIC PERSPECTIVE ON THE RHONE TO BARCELONA PROJECT

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1 WATER DEMAND MANAGEMENT IN DENMARK: A NORDIC PERSPECTIVE ON THE RHONE TO BARCELONA PROJECT Introduction Mikael Skou Andersen, Associate Prof. Department of Political Science and Centre for Social Science Research on the Environment Aarhus University, Denmark. In response to the Rhone to Barcelona project I have provided a short summary of water demand management in Denmark - an alternative approach to the conventional supply management which the project seems to represent. Challenges to water supply in Copenhagen and Denmark Denmark's capital Copenhagen is located on the island of Sjællland (Zealand), and with about 1,8 million inhabitants in the Greater Copenhagen area a considerable pressure is placed on the available water resources of this island. Copenhagen Water is the main supplier of water to the municipality of Copenhagen and the surrounding municipalities of the Greater Copenhagen area. Water is being extracted from various locations on the island of Zealand in order to assure supply. Copenhagen Water relies on contracts and concessions agreed at the turn of the century with a number of smaller municipalities outside of the Greater Copenhagen area, and the most significant of these concessions will expire in The municipalities on Zealand, who agreed to these concessions at unfavourable conditions a long time ago, have long complained that the metropolis of Copenhagen has seized 'their' local water resources and that water is being used inefficiently in Copenhagen. Today, however, Copenhagen has managed to develop a very efficient policy for the consumption of water, as shown below. There are in fact ample water resources available in neighbouring Sweden, separated from Copenhagen only by the narrow Øresund (the Sound), only a few km wide. In the 1960's, when water consumption was increasing rapidly, it was for some time considered to import water from Sweden. Such water supplies could be brought from the lake area north-east from Helsingborg and through the region of Skåne to Copenhagen. In fact Swedish water authorities did prepare aqueducts to lead water from the lake area to southern Sweden, e.g. in order to provide for an opportunity for export to Denmark. These preparations took place at the technical level, but the option to import water from Sweden was not seriously considered in Denmark. In the 1970's optimistic forecasts regarding industrial growth in southern Sweden led the Swedish water supply authorities to construct a 80 km transfer tunnel with annual capacity of 190 million m 3 water from the lake area Bolmen to southern Sweden. It was also considered to export water through this tunnel to Copenhagen and Zealand. However, additional water reserves were identified from various lake district in northern Seeland. In Sweden water consumption remained well below the optimistic forecasts, and presently only 20 per cent of the tunnel capacity is used, so that the transport system represents a poor investment with huge over-capacity.

2 During the 1980's the available ground and surface water resources began to diminish in Denmark due to leakage of different pollutants into the groundwater. Chemicals, polluted soil and leakage of pesticides and nutrients were the main factors of contamination, forcing to close a number of extraction wells. As a result the water balance on the island of Zealand became a delicate issue. Extraction had reached a point which affected the carriage of water in the major streams, and the level of groundwater was sinking many places. The Danish Water Council, in its 1992 report, pointed out the need to draw up a general management plan for water supply for the island of Zealand, and pointed to the problem of over-extraction around Copenhagen and other major cities. In 1991 the extraction on the island of Zealand was 222 mio. m 3, of which 26 mio. m 3 did not satisfy the quality criteria. A possible additional resource of about 132 mio. m 3 was available, but if extracted it would mean that streams and water courses would be affected in a way not acceptable. The actual additional resource was hence only 19 mio. m 3. Following the detection of pesticides in ground water wells in 1994 the Danish Water Supply system came into a state of crisis. Historically it had been based on extraction of ground water that was available in ample quantity and high quality. On the countryside and in the villages small cooperatively managed water works had been established, so that Denmark had a very decentralised system of water supply with about 300 municipal water works and nearly 3000 small private water works. The detection of pesticides in groundwater magazines, leached from Denmark s intensive agriculture, has proven to be a major challenge to the water supply sector. Many small water works had to close down because their wells have been polluted, and instead the larger municipal utilities have taken over the responsibility for supply. Also on the island of Zealand the pesticide problem has made inroads into the available resources for water supply, and has necessitated a strengthened policy for savings. Achievements with demand side management In a response to these challenges, prevalent not only in Copenhagen but across the country, emphasis has been placed on demand side management. In a 1992 report, the Danish Board of Technology Assessment outlined a comprehensive policy for water savings, and its recommendations have gradually been incorporated into official policies. According to a strategy paper on water supply and groundwater protection, drawn up by the Minister of Environment and submitted to the Parliament in January 1993, there are three components in the new approach: 1) water savings; 2) prevention of further groundwater pollution and 3) reorganisation of the water supply system. In April 1993 it was decided to introduce a national tax on water supply to promote water savings. The rate of the tax is 5 DKK/ m 3 (0,64 EURO/ m 3 ). The tax has been introduced stepwise to allow for adaptation and to allow consumers to invest in water saving measures. The revenue from the tax is used to lower income taxes. VAT is levied on water tariffs and, inter alia, also on the tax, so that the final effective tax rate is 6,25 DKK/ m 3 (0,80 EURO/ m 3 ). The tax is levied on all types of abstractions, but industries can deduct the tax from their VAT payment. The tax has been phased in with an increase of 1 DKK per year from 1994, with the final increase effective from The full effect of the tax is hence not reflected in the below figures that cover the period until 1996.

3 Households Business Institutions Leakage Total l/person/day Table 1.a: Water consumption (million m3). Source: Danmarks Statistik, 1998; 1999). Per capita m 3 /year l/day 70,2 66,5 63,2 62,8 59,7 57,8 53,6 52, Table 1.b: Per capita household consumption. (Source: Danmarks Statistik, 1998; 1999). Water tariffs have been increasing from the late 1980's due to the increase in sewerage bills. The first decline in household water consumption took place in 1990, when it dropped from 360 million m 3 to 341 million m 3. From 1990 to 1996 it dropped to a further 278 million m 3, so that the total reduction from was 23 per cent. From 1989 to 1996 the average consumption per capita declined from 314 l to 251 l per day counting all purposes, including leakage. As regards household consumption it declined from 192 l per day per capita in 1989 to 145 l per day per person in and is expected to decline further. The consumption per capita varies across the country; The lowest consumption was in Vejle county (133 l/person/day) and the highest was in Frederiksborg country (176 l/person/day). In 1997 also Copenhagen achieved a consumption of 133 l/person/day, and the aim of the demand management policy is to decrease consumption to 110 l/person/day before year The decrease from 1994 to 1996 has not been bigger than the decrease from 1992 to 1994, which could be interpreted to imply that the water tax has been less significant. However, the price increases in water tariffs and sewer charges (cf. table 1.c more than 50 per cent) were significant even before the introduction of the water tax. In addition one must expect higher price elasticity as one moves upwards the demand curve. DKK / m Water tariff Sewer charge Water tax Sum VAT 25% Total Index 3,03 3,13 2,96 2,94 3,10 3,17 3,27 3,53 6,53 7,29 7,92 8,34 9,43 9,56 10,29 10,60 1,00 2,00 3,00 9,56 10,42 10,88 11,28 12,53 13,73 15,58 17,13 2,39 2,61 2,72 2,82 3,13 3,43 3,90 4,28 11,95 13,03 13,60 14,10 15,66 17,16 19,48 21, Table 1.c: Water prices for households (Source: Vandforsyningsstatistik, 1996).

4 The consumption of businesses and institutions declined from 170 million m3 to 153 million m3 (10 per cent), a decline which is believed to be more linked with the increase in sewerage charges, than with the water tax. Business consumption increased again from 1994 to 1996, a tendency which probably is linked with the economic growth since Leakage from supply systems declined by 14 per cent. According to a survey carried in August 1998 by Denmark Statistics the use of water saving appliances is now common among Danish households. Table 2.a. provides an overview. Water saving taps are less common than one would expect, with only 43 per cent indicating that they have such devices added to their water tap. It costs only a few kroners. It is more surprising that 37 per cent of households indicate that they have invested in low-flushing toilets (3- and 6-l flush versus former 10-l flush). 50 per cent indicate that they have a modern water saving washing machine. % of households Yes No Do not Do not Sum possess know Water saving taps Water saving toilet Water saving washing machine Water saving dishwasher Table 2.a.: Disposal of water saving appliances etc. (Source: Danmarks Statistik, 1999: 81). % of households ("Do not possess" refers to bath tub or garden). Takes shower (vs. bath tub) Limits garden watering Turn off tap when tooth brushing Yes No Do not Do not Sum possess know Table 2.b.: Methods of water saving (Source: Danmarks Statistik, 1999: 81). Significance (% households): for the environment Very Big Some None Do not No Sum big know savings for price Table 2.c.: Importance of different reasons for water (Source: Danmarks Statistik, 1999: 81). Table 2.b. shows other methods whereby consumption of water is reduced, and table 2.c. shows how respondents rank different reasons for their behaviour. Environmental reasons are coupled with reference to the price, environmental reasons being the primary factor - something that reflects the broad public debate on the need for water savings in the Danish media.

5 Since it is expensive to clean polluted water for supply purposes the demand reduction is in most cases a very cost-effective option. Simple water saving devices can be obtained at very low cost and there is no practical pay-back period. Water saving toilets require a pay-back period of 4-5 years. Import of water from Sweden would have required huge investments. The Rhone to Barcelona project I am not a specialist on the particular difficulties of Barcelona, but the very idea of transferring water from the Rhone over several hundred km to the region of Barcelona, sounds to be the kind of solution that engineers find fascinating and challenging, but which will reward customers with large water bills, and deprive the environment of its natural water resources. In the paper by Josep Verges it is estimated that the long term domestic consumption per person for the Barcelona region is likely to be between 120 and 165 l/day, with an average of 145 l. By coincidence, this is exactly the figure that has emerged after a decade of water demand management in Denmark: 145 lcd - and this figure is expected to decline further. In Copenhagen the consumption was only 133 l in 1997 and is expected to decline further. These savings have been possible without a decline in the comfort of water services, and often through simple water saving measures and devices. The key problem for Spanish water demands seem to be irrigation needs and the policy to provide water at low and subsidised fees to farmers. Comparisons between Denmark and Spain are less obvious on this aspect, due to climatic differences. However, in Denmark farmers have also made claims on water resources for irrigation purposes, and irrigation has posed similar problems to water planners - being a cuckoo in the nest, pressing out other needs. Due to the ready availability of groundwater farmers have been able to run their own drillings and to establish irrigation. However, recent changes in energy prices have made irrigation less attractive and has slowed the renewal of irrigation capital. In water planning irrigation is given the lowest priority after household use and industrial use, because the value of water used for this purpose is much lower than for other purposes. Similar cost assessments should be made for the situation in Spain. Spanish vegetables have a considerable market in Denmark. However, in recent years Danish consumers have become more conscious about the way food is produced and demand for sustainable and organic food is growing. Samples show that foreign vegetables are more infected with residues of pesticides than domestic products, and many consumers are particularly skeptical about Spanish products such as salads etc. A more long-term oriented strategy for Spanish agriculture might consider the changing preferences in Northern Europe and study options for more sustainable production methods. I see few options for grandiose water infrastructure projects in such a scenario.