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

Improve irrigation efficiency Reduce total production Sell purchase Irrigation district Metropolitan area Sub-urban areas

(permanent, temporary,

• ption)

Surplus water

Reservoir Desalination

WATER WATER MARKET MARKET RESSOURCE RESSOURCE AUGMENTATI AUGMENTATI ON ON Water conservation Sell Surplus water WATER WATER CONSERVAT CONSERVAT ION ION

❹ ❸ ❷ ❶

Leaks Water efficiency

WATER WATER MARKET MARKET purchase

Tradable water saving certificates

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

Simulated market equilibrium

> Without & with market

Reference situation (no trade) Trade without spatial restriction Vol saved 5256 6257 Total cost 1526 1131 Average cost 0.29 0.18 Vol traded ‐‐ 2459

• 32 DWU can’t meet their target
• Deficit of 16% in volume
• Objective can be met
• -25% cost
• 40% saving obtained

through trade

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