Provision and financing of rainwater services - The Portuguese case

Transcription

1 Pan-European Symposium Water and Sanitation Safety Planning and Extreme Weather Event th April, Bilthoven The Netherlands Provision and financing of rainwater services - The Portuguese case Adelino Fortunato and Rita Martins FACULTY OF ECONOMICS UNIVERSITY OF COIMBRA Centre for Business and Economics Research - CeBER

2 SUMMARY INTRODUCTION RAINWATER SERVICES PROVISION DRIVERS FINANCING RAINWATER SERVICES THE PORTUGUESE CASE CONCLUSION

3 INTRODUCTION CHANGES IN RAINFALL AND STORMWATER ARE CRITICAL FACTORS DETERMINING THE OVERALL IMPACT OF CLIMATE CHANGES IN A WARMER CLIMATE HEAVY RAINFALL WILL INCREASE AND WILL PRODUCE MORE INTENSE EVENTS WITH HIGHER RISK OF FLOODS THIS IS WHY WE NEED A DEDICATED FLOOD PROTECTION INFRASTRUCTURE IN ADDITION TO WATER AND WASTEWATER UTILITIES

4 INTRODUCTION WE MUST TAKE PROFIT FROM AN INTEGRATED APPROACH TO ECONOMIC AND SOCIAL DEVELOPMENT, IN ORDER TO IMPLEMENT THE ADEQUATE MEASURES FOR RAINWATER AND FLOOD PROTECTION, COMBINING ENVIRONMENTAL AND TECHNICAL ASPECTS INCLUDING A DEDICATED INFRASTRUCTURE SUPPORTED BY DETENTION- BASED TECHNOLOGIES, AS WELL AS ECONOMIC AND SOCIAL EQUITY PRINCIPLES

5 INTRODUCTION TO GUARANTEE THE AVAILABILITY OF SUFFICIENT BUDGETS FOR ADEQUATE PROTECTION, POLICY MAKERS NEED TO CONSIDER THIS ISSUE NOW AND TAKE THE LEAD IN APPROPRIATE DECISIONS WITH THE AIM TO (RE)COVER FUTURE COSTS OF FLOOD PROTECTION PUBLIC INVOLVMENT IS MANDATORY IN THE PROVISION OF RAINWATER SERVICES AND ITS FINANCING BECAUSE OF MARKET FAILURES (e.g. PUBLIC GOOD ARGUMENT) AND BECAUSE MARKET SOLUTIONS IN CRITICAL AREAS MAY NOT BE AFFORDABLE OR MAY BE VULNERABLE TO FREE RIDING

6 INTRODUCTION LARGE SCALE PROJECTS IN DENSELY POPULATED REGIONS OBLIGE THE NATIONAL GOVERNMENT INTERVENTION TO PRECLUDE FROM FREE RIDING, TO SHARE THE RISK AMONG SOCIETY, TO TAKE PROFIT FROM POSITIVE EXTERNALITIES (SPILLOVERS) AND TO ENSURE OPTIMAL PROVISION (DEVERELL, 2015: 13) IT IS THE PUBLIC GOOD ARGUMENT: NON-RIVALRY AND NON-EXCLUDABILITY, EXTERNALITIES AND ASSIMETRY OF INFORMATION PROPERTIES DETERMINE THAT MARKET EQUILIBRIUM IS NOT EFFICIENT AND GOVERNMENT INTERVENTION IS NEEDED

7 INTRODUCTION THE MAIN OBJECTIVE OF THIS PAPER IS TO EVALUATE THE CURRENT DESIGN OF THE PORTUGUESE RAINWATER SYSTEMS IN TERMS OF PROVISION AND FUNDING

8 RAINWATER SERVICES PROVISION DRIVERS THE ECONOMIC LITERATURE RELATED TO RAINWATER IS SCARCE 1) ONE IMPORTANT ISSUE IS THE RESPONSIBILITY FOR THE PROVISION OF RAINWATER SERVICES, NAMELY DRAINAGE, EITHER THROUGH THE IMPLEMENTATION OF NEW RAINWATER DRAINAGE SYSTEMS OR THROUGH THE REHABILITATION OF THE PRE- EXISTING SYSTEMS THAT IS, THE INTEGRATION OR DISAGGREGATION WITH OTHER SERVICES, NAMELY THE PROVISION OF WASTEWATER SERVICES 2) ANOTHER ISSUE IS THE INVESTMENT NECESSARY TO ENSURE THE ABILITY TO RESPOND TO RAINWATER DRAINAGE IN THE PEAK PERIODS AND 3) THE FINANCING OF THESE SERVICES

9 RAINWATER SERVICES PROVISION DRIVERS THE TRANSFORMATION OF NATIVE AND AGRICULTURAL LAND INTO URBAN LAND HAS RADICALLY CHANGED THE HYDROLOGICAL REGIME HOWEVER, STORMWATER IS NOW ALSO VIEWED AS A RESOURCE TO BE USED BENEFICIALLY AND RETURNED TO ITS NATURAL PATHWAYS WE NEED TO COMBINE DETENTION-BASED TECHNOLOGIES (GREY INFRASTRUCTURES) WITH GREEN EVAPOTRANSPIRATION- BASED CONTROLS TO RESTORE HYDROLOGY (GREEN INFRASTRUCTURES)

10 RAINWATER SERVICES PROVISION DRIVERS GREEN MEANS LOW-IMPACT DEVELOPMENT INFRASTRUCTURES (DESIGN OF URBAN STORMWATER CONTROLS, 2012) PROJECTS MUST MAINTAIN OR RESTORE, TO THE MAXIMUM EXTENT TECHNICALLY FEASIBLE, THE PRE- DEVELOPMENT HYDROLOGY WITH REGARD TO THE TEMPERATURE, RATE, VOLUME AND DURATION OF FLOW IT IS A HOLISTIC VIEW USING THE CONCEPT THAT STORMWATER CONTROLS MUST PURSUIT VARIOUS OBJECTIVES OF STORMWATER MANAGEMENT (Idem, 2012)

11 RAINWATER SERVICES PROVISION DRIVERS HOWEVER THE IDEA OF RAINFALL UTILITY IS GETTING MORE AND MORE POPULAR AND THIS MEANS: A PROGRAM THAT DEFINES OPERATION AND MANAGEMENT OF THE INFRASTRUCTURE AN ORGANIZATION THAT IS RESPONSIBLE FOR GOVERNANCE FUNDING THAT DEFINES FINANCING OF THE SYSTEM

12 FINANCING RAINWATER SERVICES FULL COSTS RECOVERY IS A KEY ISSUE WHEN IT COMES TO WATER SERVICES IN EUROPE (WDF ARTICLE 9) ARTICLE 9 OF THE DIRECTIVE STATES: Member states shall take account of the principle of recovery of the costs of water services, including environmental and resource costs, having regard to the economic analysis conducted according to Annex III, and in accordance in particular with the polluter pays principle

13 FINANCING RAINWATER SERVICES BUT CONTRARILY TO WHAT HAPPENS TO WASTEWATER CHARGES, WHICH ARE INDEXED TO VOLUMES OF WATER CONSUMED, IT IS NOT POSSIBLE TO CHARGE CONSUMERS WITH A VOLUME OF RAINWATER USED SINCE THERE IS NO WAY OF QUANTIFYING THE LEVEL OF CONSUMPTION

14 FINANCING RAINWATER SERVICES ACCORDING TO BAPTISTA (2016), THE RECOVERY OF THE RAINWATER COSTS CAN BE DONE THROUGH FEES OR BY TARIFFS IMPOSED ON THE PROVISION OF RAINWATER DRAINAGE SERVICES AND THE USE OF FEES WOULD BE THE MOST APPROPRIATE OPTION, SIMILARLY TO WHAT HAPPENS TO STREET LIGHTING OR URBAN CLEANING

15 FINANCING RAINWATER SERVICES SIMULTANEOUSLY CHARGING ALL INDIVIDUAL CONSUMERS AND THE MUNICIPALITY, ACCORDING TO THE IMPERVIOUS AREA OF EACH ONE, IS THE FAIREST OPTION (SEE THE AMERICAN EXPERIENCE WITH ERU, OR EQUIVALENT RESIDENTIAL UNIT) THE DIFFICULTIES OF THIS OPTION STEM FROM THE NEED TO HAVE AN UPDATED REGISTRATION OF THE IMPERVIOUS AREA

16 FINANCING RAINWATER SERVICES 21 CANADIAN MUNICIPALITIES USE SEPARATE RAINWATER FEES TO FUND RAINWATER MANAGEMENT IN THE UNITED STATES, MORE THAN 1,600 MUNICIPALITIES AND UTILITIES HAVE IMPLEMENTED RAINWATER FEES ENGLISH AND WELSH UTILITIES ALSO CHARGE SURFACE WATER DRAINAGE FEES AND THE UK GOVERNMENT ADOPTED IN 2015 A PROGRAM KNOWN AS FLOOD RE WHICH ESTABLISHED A SUBSIDISED INSURANCE AGAINST FLOODS IN FLOODING RISK AREAS (ABI, 2015) IN OTHER COUNTRIES AROUND THE WORLD GOVERNMENTS CHARGE RAINWATER FEES TO PROVIDE ADEQUATE RAINWATER FUNDING

17 THE PORTUGUESE CASE THERE IS A CERTAIN CONSENSUS ON THE URGENCY OF ADOPTING MEASURES TO DEAL WITH EXTREME CLIMATIC EVENTS CONSEQUENCES THE PORTUGUESE LEGISLATION ESTABLISHES: in the case of new systems wastewater drainage systems and rainwater systems should be separate. in the case of renovation of the existing systems transition to separated systems should occur.

18 THE PORTUGUESE CASE FINANCING OF RAINWATER SERVICES: In the case of separate networks the question arises as to whether consumers should contribute to the recovery of rainwater costs or whether it should be financed by municipal budgets (or APA Portuguese Environment Agency) Collection of fees for rainwater services may raise equity issues and, by burdening the value of water and wastewater services bills, can create or add affordability problems

19 THE PORTUGUESE CASE THE IMPLEMENTATION OF TARIFFS HAS THE PROBLEM OF ITS DEFINITION RAINWATER SERVICES HAVE THE MORE PRONOUNCED CHARACTERISTICS OF PUBLIC GOOD SUCH AS NON-EXCLUSION AND NON-RIVALRY THAN IN SUPPLY AND SANITATION Charging for rainwater services based on an indexation to the volumes consumed (as happens with wastewater services) is difficult to be understood and accepted by water supply and sewage services customers.

20 THE PORTUGUESE CASE IN PORTUGAL, THE ECONOMIC REGULATOR (ERSAR) ESTABLISHES A TARIFF SCHEME FOR WATER SUPPLY THAT COMPRISES A FIXED CHARGE AND FOUR INCREASING BLOCK RATES, AND THE SAME TARIFF STRUCTURE FOR WASTEWATER SERVICES (FOR AN ESTIMATED VOLUME OF SEWAGE OF 90% OF THE VOLUME CONSUMED) THERE IS NO TARIFF RECOMMENDATIONS IN WHAT CONCERNS TO RAINWATER SERVICES AND THUS, IN GENERAL, NO CHARGES ARE COLLECTED HOWEVER, THERE ARE FEW EXCEPTIONS AS THE CASE OF EPAL (LISBON) OR ÁGUAS DO PORTO

21 THE PORTUGUESE CASE Municipality of Lisbon Services Who provides? Who charges? Water supply EPAL Wastewater Solid waste Lisboa City Council Lisboa City Council Fixed monthly charge + four increasing block rates according to 90% of the volume of water consumed drainage of wastewater + rainwater

22 THE PORTUGUESE CASE ANOTHER PORTUGUESE WATER UTILITY THAT CHARGES FOR RAINWATER SERVICES IS ÁGUAS DO PORTO, A MUNICIPAL PUBLIC FIRM WHERE THE TARIFF SCHEME EXPLICITLY SPECIFIES THAT WASTEWATER TARIFFS INTEGRATES THE ENVIRONMENTAL MANAGEMENT OF DOMESTIC AND RAINWATER NETWORKS AND THEIR FINAL DESTINATION

23 CONCLUSION THERE IS SOME CONSENSUS IN PORTUGAL ON THE URGENCY OF ADOPTING MEASURES TO DEAL WITH EXTREME CLIMATIC EVENTS CONSEQUENCES, NAMELY THE DRAINAGE OF RAINWATER BUT THERE IS A LONG WAY TO GO REGARDING THE EFFECTIVE PROVISION OF RAINWATER SERVICES AND FUNDING DUE TO THE PUBLIC NATURE OF RAINWATER SERVICES CHARGING FOR RAINWATER SERVICES IS NOT AS EASY AS CHARGING FOR WATER SUPPLY

24 CONCLUSION DIFFICULT TO APPLY THE USERS PAY PRINCIPLE NOT CHARGING INADEQUATE FUNDING LEAVES CITIZENS VULNERABLE TO FLOODS, EROSION AND WATER POLLUTION THERE IS NO TARIFF RECOMMENDATION FOR RAINWATER SERVICES IN PORTUGAL NO CHARGES ARE COLLECTED, IN GENERAL SOME EXCEPTIONS ARE EPAL IN LISBON AND ÁGUAS DO PORTO

25 Thank you! Adelino Fortunato Rita Martins