EPI-Water’s researcher, Gonzalo Delacámara ( IMDEA ), presented EPI-Water in Paris (September 6 th , 2011), at UNESCO’s headquarters, as part of the Inception Meeting of the GEF project on “Groundwater Governance: a global framework for country action” . The presentation was delivered in the session “How to build a global framework for action [for groundwater governance]”.
Beyond introducing the audience to EPI-Water, Gonzalo explored the links between groundwater governance, economic development, and environmental benefits, specifically through analysing the approach of economic analysis to groundwater management.
The project “Groundwater Governance: a global framework for country action” has been prepared at the request of the GEF Secretariat and following recommendations of the GEF STAP , in response to the emerging global concerns over increasingly unsustainable use of groundwater and degradation of aquifers. This 3-year project (2011-2013) is co-financed and implemented by four partner agencies: FAO, IAH, UNESCO-IHP, and the World Bank.
Another researcher involved in EPI-Water, Miguel Solanes (IMDEA), also chaired a session at the meeting (“Tools for changing perceptions and behaviours in relation to groundwater and aquifers”, analysing how the more formal legal and economic approaches compare with the promotion of aquifer awareness and self-organization.
There are clear links between EPI-Water and this GEF project, despite the wider scope of the latter in spatial terms, the somewhat difference nature of both projects, and the wider scope of EPI-Water in some aspects (i.e. covering all water resources, not just groundwater).
In synthesis, Gonzalo pointed out a number of issues:
– While economic instruments to manage surface water and groundwater are alike, they are not exactly the same as a result of certain peculiarities of groundwater resources.
– EPIs can provide incentives to allocate and/or use groundwater more efficiently. Efficiency, though, tends to be analysed (if at all) from a static perspective and also de-linked from equity.
– Groundwater resources, fraught with externalities, have largely been unregulated. The economic literature on groundwater is predominantly of a partial equilibrium type, taking the rest of the economy parametrically.
– From a welfare perspective, the optimization of groundwater use should be linked to dynamic efficiency (and not just static), and intergenerational equity. This is linked to physical return flows, which are not always taken into account in a proper manner in some water legislations and management approaches.
– There is a need to reconcile two different conceptions of groundwater resources: it is clear, from an economic viewpoint, that much emphasis has been placed from a management perspective on the “flow” dimension (income generated from groundwater exploitation); not so much on the “stock” dimension, surprisingly: groundwater resources are “natural capital” assets, which amongst other things generate income flows; furthermore, groundwater resources positively contribute to economic and social welfare in not to explicit (but not less important) ways: they sustain biophysical flows of ecosystem services.
– This requires moving from a strict financial perspective (extraction costs, financial profitability in irrigation, financial cost of bulk water for water utilities, etc.), which is essential anyway, to a more comprehensive economic perspective (taking account of externalities and multiplier effects on macroeconomic variables – that is, a formal efficiency analysis) and a more complex analysis of social (i.e. equity) concerns.