Technical Assistance for Conversion of River Basin Action Plans into River Basin Management Plans Economics in the contract INCEPTION WORKSHOP ISTANBUL.

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Technical Assistance for Conversion of River Basin Action Plans into River Basin Management Plans Economics in the contract INCEPTION WORKSHOP ISTANBUL February María del Tránsito SÁNCHEZ TAMARIT

Index 1. Implementation steps I. Initial documents II. Overview of the Significant Water Management Issues III. River Basin Management Plan 2. Economic analysis steps I. Characterization of the river basin district II. Potential measures to meet environmental objectives III. Integration of economic analysis into the policy decision and management cycle 3. Aim of the economic analysis 1

1. Implementation steps I. Initial documents (Component 2: Characterization & SWMI)  Timetable & work programme ( Chapter IV ): timetable of work  Consultation project: stakeholder meetings, RB stakeholder consultation, awareness campaigns & public involvement; international coordination  Characterization of the river basins: characteristics of the river basin, environmental impact of human activity, economic valuation of water uses II. Overview of the Significant Water Management Issues (Components 2 & 3)  Major current and foreseeable problems, main pressures and impacts, potential measures and possible alternatives to meet environmental objectives, sectors and groups affected by the programme of measures  Monitoring network: surveillance, operational, investigative and protected areas monitoring  Analysis of current status: surface water bodies & groundwater bodies 2

1. Implementation steps III. River Basin Management Plan Component 4: PoM & RBPAP into RBMP  Draft Final  General description of each RBD  Summary of the characterization of each RBD  Identification of water bodies according to their status  Environmental objectives of each water body and derogations  Gap analysis  Summary of the Programme of measures Component 5: Water Information System  Models, excel tools; GIS mapping  Capacity building: training workshops and internships 3

2. Economic analysis steps 4 Economic elements are linked and must be integrated (WATECO Guidance Nº 1) Current status Superficial WB (Guadiana RB) Baseline scenario status Integration of economic analysis into the management cycle EU CIS Guides will be taken into the account in the analysis and development of Turkish manuals

2. Economic analysis steps Activity: Carry out and economic analysis of water use, cost recovery ratios and develop a baseline scenario Economic analysis of water uses and baseline scenario outputs:  Economic significance of water uses (household, industrial & agriculture)  Trends in water supply and demand  Trends in water investments  Human pressures in WB (abstractions and discharges by economic sector)  Trends in macro-economic policies, population growth and other 5 Territorial distribution of main water uses (Guadiana RB) Water uses demands trends (Guadiana RB)

2. Economic analysis steps Activity: Carry out and economic analysis of water use, cost recovery ratios and develop a baseline scenario Cost recovery analysis (WFD article 9) outputs:  Role of pricing: identification of water services structure; entities providing water services; public sector investors; cost-recovery instruments (cost recovery analysis is delimited to water supply & sanitation and disaggregated into industry, households & agriculture)  Water services cost (financial, environmental and resource)  Water services income  Cost recovery level of water services (possible policy advice on environmental taxes and charges in the water sector) 6 Water services financial cost and income (Guadiana RB) Cost-recovery levels by water service (Guadiana RB)

2. Economic analysis steps Activity: Carry out and economic analysis of water use, cost recovery ratios and develop a baseline scenario Input data templates (with specifications of spatial and time scale) have been developed (Turkish source of information to be completed) Excel tools “easily” to adapt to the Turkish specific data 7 Revenues collections & price levels forecast by sub-basins (Guadiana RB)

2. Economic analysis steps Activity: Programme of measures Elaboration process of the Programme of measures Supplementary and compulsory basic measures DSI (State Hydraulic Works) Master Plans Measures under existing legislation National Implementation Plan

2. Economic analysis steps Activity: Cost effectiveness analysis (CAE) for all measures & Component 5. Water Information System Cost-effectiveness information was put together by the Spanish Ministry of Environment in the form of Technical Guidelines and a Information System for Characterization of Measures (SICMACE) The SICMACE database will be used as tool for the CAE A CEA module for GEOIMPRESS is foreseen to be developed Besides, a CEA model has been used in some Spanish RB 9 The CEA module is composed of 3 modules Its application requires Qual2k calibration, pressures of the baseline scenario and PoM alternative options Measures evaluated are sanitation and water reutilization Modules of the CAE model

2. Economic analysis steps Activity: Cost effectiveness analysis for all measures Outputs:  Cost-effectiveness analysis of the basic and supplementary measures  Group of measures that make technically possible to attain the environmental objectives at the lowest cost Input data templates (with specifications of spatial and time scale) have been developed (Turkish source of information to be completed) 10 Surface water bodies with and without PoM aimed at achieving environmental objectives, population centers with sanitation actions and groundwater bodies PoM by measures types and horizons (Guadiana RB) Guadiana RB

2. Economic analysis steps Activity: Identifying exemptions and derogations for specific water bodies ToR: milestones to achieve “good water status” by (?) 11 Exemptions:  Derogation (WFD 4.4)  Less stringent objectives allowed under certain conditions (WFD 4.5)  Temporary deterioration of the status in case of natural causes or "force majeure“ ( WFD 4.6)  Permanent deterioration following new modifications to the physical characteristics of a surface water body or alterations to the level of GWB or failure to prevent status deterioration of a body of surface water ( WFD 4.7) Economic steps in the identification of exemptions and derogations (WATECO Guidance Nº 1)

2. Economic analysis steps Activity: Identifying exemptions and derogations for specific water bodies Activity: Identifying additional objectives in protected areas Reasons to extend deadline / set lower objective: technical infeasibility; disproportionate costs; natural condition Baseline: no further deterioration allowed Disproportionate costs:  Less stringent objectives (cost-benefit analysis): political judgement informed by economic information; considerable margin by which costs (of the measures) exceed benefits (non-market benefits and non-use values from reaching good water status)  Derogations: public budget affordability (financial and budgetary implications) and ability to pay of water users 12 Cost-benefit matrix (Guadiana RB)

2. Economic analysis steps Activity: Identifying exemptions and derogations for specific water bodies Activity: Identifying additional objectives in protected areas & Outputs:  Specific objectives for water bodies affected by protected areas  Heavily Modified Water Bodies final designation  Artificial Water Bodies final designation  Identification of exemptions and derogations for specific water bodies Input data templates (with specifications of spatial and time scale) have been developed (Turkish source of information to be completed) 13

The economic analysis is a decision support tool for Integrated Water Resource Management a process which promotes the coordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems Arnal

3. Aim of the economic analysis Component 2: Characterization & Significant Water Management Issues  The economic analysis seeks to get an overview of the WFD pillars (environment, hydrology and economics) through: the study of trends in water supply and demands consumptions (which does not replace the resource management model analysis) the study of human pressures on water bodies: abstractions and discharges (which does not replace the model pressures analysis) the study of cost-recovery and role of pricing: ensure adequate contribution of the different water uses and adequate incentives for users to use water resources efficiently thus contributing to the environmental objectives (always considering the socio-economic and environmental implications) 14

3. Aim of the economic analysis Component 4: Making a PoM & conversion of the RBPAP into RBMP  The economic analysis is a decision-making tool from the economic point of view: For water allocation (and reallocation) by taking into account the analysis results of the economic significance of agriculture and industrial water use (WFD article 5) For the prioritization of measures to be implemented by taking into account the results of the human pressures analysis that reveals a ecological status trend (baseline scenario):  Good ecological status scenarios would lead to prioritize measures of: Protection of hydraulic public water domain; Mitigation of the effects of floods and droughts; Rationalization of water use (governance); Increase of water resources  Worse than good ecological status scenarios would lead to prioritize the following type of measures: Priority substances; Linked to drivers & impacts; Reduction of diffuse pollution, point source pollution; Morphological; Environmental restoration, Water pricing... 15

The economic analysis is a decision support tool for Integrated Water Resource Management a process which promotes the coordinated development and management of water, land and related resources, in order to maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems Arnal

2. Economic analysis steps  Characterization & SWMI Component 2  Characterization of the RBD: IMPRESS (preliminary designation of Heavily Modified Water Bodies) and economic analysis of water uses  Potential measures and possible alternatives to meet environmental objectives, sectors and groups affected  Integration of economic considerations in environmental awareness Principals: cost-recovery, polluters-pay  River Basin Management Plan Component 4  Summary of the characterization of each RBD  Final designation of Heavily Modified Water Bodies  Environmental objectives (derogations and exemptions)  Gap analysis  Programme of measures  Integration of economic analysis into the policy decision Analysis: cost-effectiveness, affordability or ability to pay of users and Administration (derogations), cost-benefit (less stringent objectives) 5