Water markets in the Urban sector Simulating a Market for Water - PowerPoint PPT Presentation

Workshop on Water Markets – Paris, February 11th, 2014 Water markets in the Urban sector Simulating a Market for Water Saving certificates in Southern France Jean-Daniel Rinaudo & Marine Vernier French Geological Survey ( Brgm ) Javier Calatrava Technical University of Cartagena Contact : jd.rinaudo@brgm.fr

Water markets in the urban sector ❸ (permanent, Reduce temporary, total option) production Sell purchase Surplus Metropolitan water area Irrigation Improve district irrigation WATER efficiency WATER MARKET MARKET ❹ Surplus ❶ Water water conservation Sell ❷ Reservoir WATER WATER purchase CONSERVAT CONSERVAT ION ION Desalination Sub-urban Leaks RESSOURCE RESSOURCE WATER WATER areas Water AUGMENTATI AUGMENTATI MARKET MARKET efficiency ON ON

Tradable water saving certificates River basin authority Allocates water quotas Define water saving targets Water Utilities Implement water conservation programs Water saving targed water saving targed is exceeded is not reached Certification Need to obtain Obtain Water Saving Authority additional certificates Vertificates Sell purchase Market regulator

Simulated market equilibrium > Without & with market Trade Reference without situation (no spatial trade) restriction Vol saved 5256 6257 Total cost 1526 1131 Average cost 0.29 0.18 Vol traded ‐‐ 2459 • Objective can be met • -25% cost • 40% saving obtained • 32 DWU can’t meet their target through trade • Deficit of 16% in volume

Conclusion > Market for WS certificates • DWU have different water saving cost => potential for trade • Intensity of trade will depend on : – Transaction costs – Cost of resource augmentation (desalination, interbasin transfer) > Market as an option • Agriculture to urban (high marginal values differences) • Option market (insurance against drought) • Need for long term agreements (no risk of shortage)

Results > Water saving measures Description of water conservation measure M1 Improve detection and repair of leaks of distribution network. M2 Free distribution of water conservation devices (households) M3 Water intensive landscapes replaced with xeric vegetation M4 Seasonal water pricing (increased rate in summer) M5 Water saving appliances in public building M6 Water saving devices in hotels (faucet aerators, toilet flushes) M7 Water saving audits for campsites / holiday parks M8 Household water saving audits (single family house) M9 Same as U8 for multifamily houses + automated reading meter. M10 Replacement of irrigated lawns with artificial turf for sport grounds

Results > Water saving measures