Internalization Analysis of Environmental Costs of Wastewater Treatment in the Valencian Community, Spain

Abstract

The need for water resources currently demands the development of measures to improve the management of these resources and increase their availability. However, these measures have an environmental impact that must be considered when carrying them out. The Water Framework Directive establishes that the economic and environmental costs of the activities carried out must be recovered, because this is necessary to ensure the sustainability of these activities and the continuity in the use of natural resources. The purification and reuse of wastewater is an activity within the framework of the circular economy that intends to reduce the environmental impact of contaminated water discharges and to increase the available resources. The problem is that this activity, being part of the production process, is linked to an environmental impact due to the use of chemical components, the construction of the facilities and, especially, the intensive energy consumption of the purification stations, since part of the energy comes from non-renewable sources. This environmental impact must be internalized in the cost structures through additional measures to mitigate it, so the objective of this paper is to determine the state of such internalization. Analyzing the costs of purification stations, the annual report of the EPSAR (Public Entity for Wastewater Sanitation of the Valencian Community) and the reports of the Hydrographic Confederations of Júcar and Segura, we can determine that there is no internalization in the stations, it is low in the EPSAR but increasing with time and for the Confederations the situation is complicated, as they cannot even recover their financial costs and the creation of several additional measures has been suspended. Finally, it has been found that there are economies of scale in terms of energy consumption of this activity, as well as significant potential energy savings during the purification process.

Water Price Effects on Consumption and Territorial Imbalances in Spain in the Context of the Water Framework Directive

“…As for the territorial aspect, implementing tariff modifications makes sense due to the lack of cost recovery of the Spanish hydrographic confederations [18,41]. In this respect, the level of cost recovery may vary between confederations, although in no case total costs are recovered, so that not only local actions, but also national measures are needed aiming at full cost recovery.…”

“…The water framework directive was implemented in a European context where, in general, the operation and maintenance costs of water services were recovered, so no major impact on price was expected where this recovery was achieved [42]. Unfortunately, in the case of Spain, costs were not recovered and, despite this and the new regulations, prices have not evolved in such a way as to complete the recovery of financial costs [18,41]. Thus, since the WFD pursue the adequate costs financing, these transfers should be reduced as much as possible, but any tariff changes that aim for this should be carefully considered.…”

“…Therefore, in Spain a contradiction between the system established by the WFD and the applied to obtain revenues is present. As a result, problems of price equity between regions and even imbalances in terms of cost recovery between the different river basins may occur [18], but, as mentioned above, the characteristics of each region must be considered, as balancing prices between regions that require different management of water resources would be unfair.…”

Water Pricing Policy as Tool to Induce Efficiency in Water Resources Management

“…In this sense, Spain is an interesting case study as it is a country that does not achieve the complete recovery of costs and new measures that generate revenue and/or reduce costs would be suitable [47]. In addition, the tariff in Spain does not consider the characteristics of households (although in specific municipalities being a large family is valued), so its modification could be beneficial.…”