The price of water is expected to increase 25.7% by 2030 to maintain urban consumption at 2022 levels, according to a study in which, for the first time, an analysis of the economic value of water in Portugal has been carried out.
The study “The economic value of water in Portugal” will be presented today at the Gulbenkian Foundation, in Lisbon, having been coordinated by the economist and professor at the “Católica-Lisbon” University, Miguel Gouveia. The two institutions sponsored the research which, they say, aims to contribute to the search for sustainable solutions for water management.
According to the study, in 2015, households spent an average of 1.3% of their budget on water and related services such as solid waste and wastewater, a lower value compared to other countries. Increasing tariffs will not be unaffordable for most families, the report says.
The combined analysis of the data indicates that urban water consumption is expected to increase by around 25.7% by 2030. “To maintain consumption at the level of 2022, the price of water will have to rise by 25.7% by 2030, for an average of 3.2 euros per cubic metre, which can be seen as the economic value of water for urban consumption”.
Speaking to the Lusa agency, Miguel Gouveia has said that in order to reduce consumption, many information and awareness campaigns are necessary, efforts that will have to be accompanied by price increases, which although not “something pleasant” will not have a major impact “on the overwhelming majority of households”.
“I also understand that more is being asked of those who have more,” he said, referring to what some municipalities already do, which is to increase prices in the upper consumption brackets.
Agriculture, the sector that consumes the most, will also have to make more rational use of water. “There has to be an effort on all fronts.”
Miguel Gouveia recalled that technological progress has led to improvements in water consumption, that washing machines today consume much less water, and that in agriculture, “30 or 40 years ago, irrigation used 14,000 cubic metres per hectare, today it uses 4000 cubic metres”.
In agriculture, he highlighted, the value of water is much higher than the cost in most cases, explaining that the study served to establish a value of water, something that was lacking in Portugal.
According to the study, the average economic value of water used in agriculture across the country and all crops, at 2022 prices, was estimated at 0.585 euros per cubic metre.
The values depend on the region of the country and the type of culture. For example, the estimate for the value of water used in rice was 0.08 euros, a positive value only due to aid from the Common Agricultural Policy (CAP), while in avocados the value of water was 2.65 euros per cubic metre.
In Portugal, the average annual rainfall has decreased by 20% in the last 20 years, and is expected to decrease by another 10 to 25% by the end of the century.
In addition to other factors, water scarcity will have a direct impact on the potential for hydroelectricity generation, making electricity more expensive, and “will have significant macroeconomic impacts, particularly on GDP (in a scenario of more severe climate effects, GDP could fall by 3.2% ), in increases in unemployment and inflation rates, and a deterioration in the trade balance.”
“We are going to have less water, it will be a gradual process, despite the fact that in Portugal there is more rain than in several countries in Europe”, but if we invest in ways to not lose water, for example more reservoirs, there could be a greater supply. Without investment, "the desert will advance across the south of the country," warns Gouveia.
“Not all investments are profitable and this can be seen with this value of water”, he said, highlighting the importance of having a “good cost-benefit analysis” of the public policies under discussion, to prevent risks of waste.
In the words of Miguel Gouveia, who cites the opinion of experts, the reuse of treated wastewater makes sense in the Algarve but less so in other regions, because the elevation of these waters (the treatment plants, WWTP, are close to sea level) has a cost.
Likewise, improvements to networks to prevent leaks will also be very expensive. “It doesn’t mean it’s not worth investing, it means we won’t get a great return,” he explained.
Transfers can be a solution, and the construction of desalination plants can also be an option, although expensive, especially as it is insurance in cases of extreme shortages, “but it cannot be a blind strategy”.
Miguel Gouveia insists on a “systematic analysis of which of the various options is worthwhile”. And he reinforces: “This is the main message, responses that are as rational as possible”.
The study will presented this afternoon, in a session that will also debate topics such as the water strategy for the agricultural sector or rainfall inequalities.
Source Lusa
