World Bank Water Forum 2002 The Two-Headed Ebro Hydrodinosaur by Josep C. Vergés [email protected] Societat Catalana d’Economia (Institut d’Estudis Catalans) Washington, D. C. 6-8 May 2002 The Spanish Water Plan, centred on the Ebro river as presented here by José Albiac and myself, is composed of two separate transfers from the Ebro Delta, one basically for irrigation of some 600 kms Southwest to Almeria, famous for the spaguetti 2 westerns that made Clint Eastwood the tallest cowboy since John Wayne, and a relatively smaller potable transfer Northeast of some 200 kms to the Olympic city of Barcelona. Albiac discusses the irrigated head while I elaborate my demand study for the Barcelona Metropolitan Authority.1 I have also undertaken reports on Spanish irrigation, the Rhone transfer to Barcelona, and Europe’s largest dam, the Alqueva in the Guadiana basin in Portugal. 2 Water policy in Spain and Portugal is summarised in my book just issued in Spanish. 3 The Ebro is the longest river in Spain, from which derives the name of the peninsula, Iberia, and flows into the Northwestern Mediterranean, in Catalonia, in a beautiful delta of rice paddies and bird sanctuaries. Just to scale our American hosts, the Ebro Delta extends 20 miles while the Mississippi Delta would hold half the Spanish Mediterranean coastline. The physical scale may be pocketsized, but Spanish water planning has still all the Mediterranean climate practices of California of yesteryear. The Golden State proved to Hollywood’s satisfaction that water flows uphill to politics, as portrayed in Polanski’s Chinatown, and Spain has a popular saying from the wetlands of the Valencia Albufera that water makes you more drunk than wine. The major transfer, 82% of the water export from the Ebro, is irrigation for which a multilayered subsidy scheme is essential, from ex ante concrete construction with European Funds to ex post agricultural production with the infamous CAP, the Common Agricultural Policy. The Water Plan is now Spanish law but Madrid has still to go cap in hand to Brussels. The underlying subsidies obviate however the 2000 Full Cost Pricing Water Directive of the European Union. The Barcelona branch does not have these subsidy needs being self -financing from consumers if the demand is there, no small matter. As the plan now stands with a single price for Ebro water, there would also be a cross-subsidy from Catalan consumers in the export of Catalan water to Spanish farmers. The Ebro region in particular is in uproar at the betrayal by politicians. The biggest demonstration in water history, with 300,000 (including the Ebro opposition politician, the good-looking journalist from the Pyrenees and myself in mid picture) forced current European Union president José María Aznar to shelve his plea for water subsidies during the Barcelona Summit held the same week of March 2002.4 Uphill Water Politics in the Barcelona Summit 1 J.C. Vergés, Estudi per a la valoració de la millor alternativa de transvasament d’aigua a l’àrea de Barcelona, Entitat del Medi Ambient, Àrea Metropolitana de Barcelona 2001. 2 J.C. Vergés “Impact of Water Pricing and Foreseen Impact of the CAP on the Use of Irrigation Water in Spain,” in A. Massarutto, coord., Water Pricing, the CAP and Irrigation Water Use, DG Environment, Brussels 2000; "Demand for Water in the ATLL Serviced Area," in B. Barraqué, dir., Water Demands in Catalonia: A European Perspective on the Projected Rhone-Barcelona Water Transfer, LATTS (ENPC and Université Paris Val-de-Marne) for Ministère de l'Environnement, Direction de l'Eau, Paris 2000; “The Alqueva Irrigation Agreement” Portugal Case Study in CEC, Cooperative Agreements in Agriculture as an Instrument to Improve the Economic and Ecological Efficiency of the European Union Water Policy, DG Research, Brussels 2001. 3 J.C. Vergés, El saqueo del agua en España, Barcelona: La tempestad 2002. 4 Climate change was discussed instead by the 15 heads of state of the European Union plus 12 Eastern European candidates. The civic organisers of the demonstration held a scientific meeting a fortnight later in the Ebro Delta, boycotted by politicians and government technicians, except José Albiac of the Aragon state government, but with the presence among others of distinguished professor John W. Day of Louisiana State University. “Del Ebro al Segura: Planificación Hidrológica y Sostenibilidad,” Fundación Nueva Cultura del Agua, Tortosa, 22nd-25th March 2002. 3 Spanish water use has little to envy California. Spain is easily the largest consumer per head for all water use in Europe, with ten times the consumption of England or Belgium and two and a half times the European average. Even the so Mediterranean French consume almost five times less (Table 1). Water woes are best viewed from a good sized pork barrel in Spain. Table 1: European Water Consumption per Head m3/y per head Index EU = 100 _________________________________________________ 1. Spain 530 256 2. Italy 523 253 3. Portugal 339 164 4. Greece 334 161 European Union 207 100 5. France 125 60 6. Finland 89 43 7. Ireland 85 41 8. Denmark 79 38 9. Sweden 71 34 10. Germany 71 34 11. Holland 62 30 12. Austria 58 28 13. United Kingdom 51 25 14. Belgium and Luxemburg 50 24 _______________________________________________________ Source: Elaborated from Ministerio de Medio Ambiente, Libro Blanco del Agua en España, 1998. As in California irrigation is at the heart of this major consumption, with 80% of regulated surface water use in Spain. Spain has a varied climate, with a wet Atlantic coast, a large continental regime and the long Mediterranean coastline. These three distinct regions shown in table 2 have large 4 differences in water use and availability. The Atlantic consumes 44% in irrigation, continental Spain, with all the major rivers, including the Ebro, 87%, and the Mediterranean, to which the similar water drought cycle Canaries is added, 71%. The Mediterranean irrigates three times less in total volume and has four times less resources than continental Spain. 56% of the irrigated area in Spain is for continental crops such as wheat and corn and only 36% for Mediterranean crops such as fruits and market vegetables.5 Surface irrigation is heavily subsidised with basin authorities charging only 15% of real operational expenditure (Table 3 ), so that incorporating the European full cost recovery principle will multiply surface irrigation prices sixfold to cover current budgetary practices. At the European Union Sintra conference, Spanish agriculture officials estimated that one third of irrigation would switch to dryland, up to 634,000 has, which on a European scale is greater than the irrigation of the whole of Portugal. Table 2: Water Basins in Spain Source: J.C. Vergés, El saqueo del agua en España, Barcelona: Ediciones de la Tempestad 2002 Table 3: Irrigation Subsidies in Spain Basin authority Irrigation charges1 Full cost2 Current charges € cents/m3 € cents/m3 as % of full cost Atlantic 0.1 2 6% Duero 0.3 4 8% 5 See J.C. Vergés, “Impact of Water Pricing and Foreseen Impact of the CAP on the Use of Irrigation Water in Spain,” in A. Massarutto, coord., Water Pricing, the CAP and Irrigation Water Use, DG Environment, Brussels 2000; tables 2 and 6 with data from Ministerio de Medio Ambiente, Libro Blanco del Agua en España, 1998. 5 Tajo 0.5 4 14% Guadiana 0.5 6 9% Guadalquivir 0.8 4 20% Ebro 0.2 2 12% Continental 0.4 4 12% South 0.6 4 16% Segura 3 7 48% Xuquer 0.2 5 6% Mediterranean 1 5 26% Spain3 0.5 4 15% Notes: (1) Confederaciones Hidrográficas and Agència Catalana de l’Aigua in 1999. (2) Current cost of dams over 50 years at 0.5% depreciation and tranfers over 25 years at 1% depreciation, plus each basin’s administration costs. (3) Irrigating 18,778 hm3 at total cost for the basin authorities of € 706 million. Source: Elaborated from C.M. Escartín and J.M. Santafé, “Application of the Cost Recovery Principle in Spain,” European Commission DG XI and Instituto da Água, Pricing Water: Economics, Environment, Society, Sintra, Portugal 1999. Original prices in pesetas rounded to eurocents (€ 1 = 166.386 pesetas. Table 4: The Water Transfer Plans of 1993 and 2000 Hm3/year 1993 Socialist Plan 2000 Popular Plan % Popular/Socialist Plans Transfers 2,310 1,000 43% Continental: 985 0 0% -Tajo 535 0 0% -Duero 400 0 0% -Guadiana 50 0 0% Mediterranean: 1,325 1,000 76% -Ebro 1,275 1,000 79% -South 50 - 0% Beneficiaries Continental 610 0 0% Mediterranean: 1,700 1,000 59% -Xuquer 755 300 40% -Segura 820 420 51% -South 0 100 100% -Catalonia 125 180 144% Source: J.C. Vergés, El saqueo del agua en España, Barcelona: Ediciones de la Tempestad 2002 The Spanish Water plan scales down the failed grand planning of the former socialist government. The major diference shown in table 4 is that the current plan removes all transfers from continental Spain concentrating on the Ebro Delta to pump water along the Mediterranean coastline. The cutback of two thirds in transfers however leaves the Mediterranean where it was, because the Ebro still transfers 79% of the previous plan. Catalonia, the ninth wealthiest out of 200 European regions, loses out with 82% of the Catalan Ebro exported and only 18% available for Barcelona. The water plan has a dozen pages on urban water economics in contrast to the hundreds on irrigation but agriculture is less than 3% of Spanish value added and 6 irrigation little more than 1%.6 Water demand is not taken in an economic sense:7 “As the quantity of water an economic agent would be willing to buy in a market at a given price.