Simulating the Impact of Pricing Policies on Residential Water Demand: A Southern France Case Study

Abstract

The case study conducted in this paper looks at residential water pricing from three different points of view. It first describes existing urban water-pricing practices in Southern France, emphasizing that pricing is not yet being used as a tool for providing economic incentives to save water. It then looks at the observed impact of pricing on water consumption, through an econometric analysis of a cross-sectional data set. The analysis suggests that demand, with an estimated price elasticity of -0.2, is not yet very responsive to price variation. A regional water model (300 municipalities) is then developed and used to simulate the potential impact of various water-pricing scenarios on aggregate water demand, aggregate water sales revenue, and consumer surpluses. The results illustrate the trade-offs that have to be made between the search for environmental effectiveness, cost recovery, and equity when implementing complex water-pricing structures such as block rates or seasonal water pricing.

Analysis of Water Tariff Reform on Water Consumption in Different Housing Typologies in Calvià (Mallorca)

“…According to [33], Spanish water tariffs do not encourage water saving because the fixed fee is too high, the variable fee is not sufficiently progressive, and marginal prices are too low. For example, the 2006 French Water law requires that the fixed charges should not exceed 40% of the water bill for urban municipalities [34].…”

Mapping current and future European public water withdrawals and consumption

“…Total water losses during distribution vary greatly between countries, but, for example, Bulgaria, Greece, Malta, Ireland and the UK all show losses higher than the European average of 7.7 % (EUROSTAT, 2013). Water pricing is increasingly being used to try to improve water use efficiency (Bithas, 2008), although the resulting impacts on the residential sector seem to be rather limited compared to those in the agricultural sector (Rinaudo et al, 2012;Höglund, 1999). In addition, we should see improvements in water use efficiency especially in regions currently experiencing water scarcity due to the greater necessity of limiting overall water use.…”

Household Water Demand in Andorra: Impact of Individual Metering and Seasonality

“…The climate indicators usually considered in Table 1 include rainfall (annual or in the summer, number of rainy or dry days) and temperature (maximal or average). For France and Spain, it is found that water use increases with temperature (i.e., [12,17,19,22,23]) or with the number of dry days (i.e., [17]). On the contrary, water consumption decreases with rainfall levels (i.e., [18,19,24]).…”

“…The impact of the seasonal population on household water consumption has already been investigated in the existing literature. In France and Spain, it is usually found that the seasonal population tends to contribute to an increase per capita water consumption (i.e., [13,17,24]). This positive effect may capture the larger share of recreational water use (swimming pool, garden watering) in holiday homes.…”