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Water Supply and
Irrigation Water Pricing in
Cyprus
Capacity building for environmental tax
reform Brussels, 05 October 20...
Water Stress
 Water exploitation index
(WEI) is defined as the
mean annual total
abstraction of fresh water
divided by th...
Rainfall patterns
Source: WDD, 2017
Water supply approach
 “No drop of water to the sea”
 Currently 108 dams with 332 Mm3 storage capacity
Source: WDD, 2017
Actual surface water availability
Source: WDD, 2017 Average: 119 Mm3 (ranging 13 – 274 Mm3)
Water Supply - Gov. Water
Projects
Source: WDD, 2017
Water use by sector
Total Water Consumption (Mm3) by Sector [average 2005-
2007]
Service Within GWP
Outside
GWP
Total
Dome...
Crop production water footprint
214 205 188 195 193 186 180 172 176
204 193 185 176 174 160
0
100
200
300
400
500
600
0
10...
Crop water footprint composition
(avg.)
187
Mm3/yr
37%
319
Mm3/yr
63%
506
Mm3/year
Cereals
40%
Roots
3%
Pulses
1%
Nuts
4%
...
Annual Groundwater Use
 GW contribution to irrigation
use
 Max: 91% in 2008 (159 Mm3/year)
 Min: 66% in 2003 (116 Mm3/y...
Water services and uses
Services Suppliers Uses Water Sources
Domestic
Water Development
Department, Water Boards,
Municip...
Water Pricing Policies 1960 -
2003
 A long tradition in domestic & irrigation sector from the 1960s.
 Volumetric pricing...
Water Pricing Policies 2004 to
date
 The WFD was transposed to national legislation in 2004 (Law
13(Ι)/2004).
 After the...
Irrigation Prices (GWP) 2004 to
date
Description / Use
Price
(€/m3
)
GWP(Surface&Groundwater)
To Agricultural Organisation...
Cost assessment (Art. 9)
 A special study was undertaken (2008-2010) to re-estimate
the total water service cost (financi...
Proposed Irrigation Prices in
2011
 For GWP keep the two part tariff system: fixed cost
plus variable volumetric charge
...
In practice…
 On top of the WFD transposition to national legislation (Law
13(Ι)/2004), the WFD’s full cost recovery prov...
Public consultation (2009-2015)
 Public participation in environmental matters is something
new for the Cypriot society
...
Public consultation (2016-2021)
 Merged public consultations for the WFD with the FD
 The process became even more lengt...
New Regulation 48/2017
Description / Use
Financial
Env&
Resource
Total (€/m3)
GWP(Surface&Groundwater)
To Agricultural Org...
New Regulation 48/2017
 The new regulation will be implemented as of April 10th 2017
 For GWP, fixed price increased, bu...
Summary
 Cyprus is the most water-stressed nation in Europe
 Water supply is enhanced by non-conventional resources
 Gr...
Reference
 Cystat (2017). Statistical Abstract 2015. Nicosia, Cyprus.
 Charalambous, K., Bruggeman, A., Giannakis, E. an...
Thank You
Christos Zoumides, PhD
Energy, Environment and Water Research
Centre
The Cyprus Institute
P.O.Box 27456,
1645 Ni...
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Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 1 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 2 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 3 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 4 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 5 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 6 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 7 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 8 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 9 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 10 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 11 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 12 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 13 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 14 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 15 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 16 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 17 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 18 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 19 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 20 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 21 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 22 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 23 Case study: Cyprus: Pricing for irrigation and the cost of water scarcity Slide 24
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Case study: Cyprus: Pricing for irrigation and the cost of water scarcity

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This presentation was given at IEEP's capacity building for environmental tax reform conference on 5 October 2017 in Brussels, Belgium.

Speaker: Christos Zoumides (The Cyprus Institute)

Case study: Cyprus: Pricing for irrigation and the cost of water scarcity

  1. 1. Water Supply and Irrigation Water Pricing in Cyprus Capacity building for environmental tax reform Brussels, 05 October 2017 Christos Zoumides
  2. 2. Water Stress  Water exploitation index (WEI) is defined as the mean annual total abstraction of fresh water divided by the long-term average freshwater resources.  It describes how the total water abstraction puts pressure on water resources.  Countries having high abstraction in relation to their resources are prone to suffer problems of water stress.  Cyprus ranks as the most water-stressed nation Source: Eurostat, 2017
  3. 3. Rainfall patterns Source: WDD, 2017
  4. 4. Water supply approach  “No drop of water to the sea”  Currently 108 dams with 332 Mm3 storage capacity Source: WDD, 2017
  5. 5. Actual surface water availability Source: WDD, 2017 Average: 119 Mm3 (ranging 13 – 274 Mm3)
  6. 6. Water Supply - Gov. Water Projects Source: WDD, 2017
  7. 7. Water use by sector Total Water Consumption (Mm3) by Sector [average 2005- 2007] Service Within GWP Outside GWP Total Domestic 68.68 11.22 79.90 Irrigation 38.24 105.01 143.25 Sewerage drainage 20.64 20.64 Recycled Water Supply 9.91 9.91 Source: WDD, 2011  Agriculture consumes more that 60% of total water use  More than 70% of irrigation outside GWP  private
  8. 8. Crop production water footprint 214 205 188 195 193 186 180 172 176 204 193 185 176 174 160 0 100 200 300 400 500 600 0 100 200 300 400 500 600 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Precipitation (mm) WaterFootprintcropproduction (Mm3/yr) CWU blue [IR] CWU green [IR] CWU green [RF] Precipitation Source: Zoumides et al. (2012; 2013)
  9. 9. Crop water footprint composition (avg.) 187 Mm3/yr 37% 319 Mm3/yr 63% 506 Mm3/year Cereals 40% Roots 3% Pulses 1% Nuts 4% Oil crops 8% Veg. 3% Fruits 22% Fodder 19% Tobacco 0% Cereals 2% Roots 8% Pulses 1% Nuts 5% Oil crops 14% Veg. 9% Fruits 53% Fodder 8% Tobacco 0% Source: Zoumides et al. (2012)
  10. 10. Annual Groundwater Use  GW contribution to irrigation use  Max: 91% in 2008 (159 Mm3/year)  Min: 66% in 2003 (116 Mm3/year)  Avg: 81% per year (151 Mm3/year) 0 50 100 150 200 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 TotalBlueWaterUse (Mm3/year) Dams Recycled Groundwater Use Groundwater Overpumping  GW overpumping (ρgw)  Wet: 1.12  13 Mm3/year  Dry: 1.53  56 Mm3/year  Avg: 1.45  47 Mm3/year Source: Zoumides et al. (2013)
  11. 11. Water services and uses Services Suppliers Uses Water Sources Domestic Water Development Department, Water Boards, Municipalities and Communities Households Surface water (dams), Groundwater, Desalination, Imported water Tourism Industry Other uses Irrigation Water Development Department, Irrigation Associations, individual farmers Crop prod. Surface water (dams and streams), Groundwater, Recycled water Livestock prod. Industry Other uses Sewage wastewater collection & treatment; secondary Sewage Boards Households Effluent from households, Tourism and Industrial units Tourism Industry Water Development Crop prod. Secondary treatedSource: WDD, 2011
  12. 12. Water Pricing Policies 1960 - 2003  A long tradition in domestic & irrigation sector from the 1960s.  Volumetric pricing started with the implementation of the first GWP and gradually became the usual practice for all water providers  The aim was to recover the projects’ financial cost, according to the National Law and Loan Agreements for financing the GWP (IBRD).  Drinking water pricing (wholesale) Full (financial) cost recovery; based on Balanced Budget method.  Irrigation water pricing to individual farmers: the price should reach at least 38% of the cost but not exceed 40% (or 65% under special conditions); based on Present Worth Value method.  Irrigation water pricing was subsidized due to the importance of the primary sector, food security, preservation of rural landscape, avoidance of urbanization  Private groundwater abstraction was (and still is) not charged. The full financial cost is paid by the well owner; this cost is thought to be high due to the depth of the wells.
  13. 13. Water Pricing Policies 2004 to date  The WFD was transposed to national legislation in 2004 (Law 13(Ι)/2004).  After the final payment of the loans and in the light of WFD requirements (adaptation preparation), irrigation water pricing from GWP was revised in 2004.  prices increased considerably (in some GWP were doubled) but kept at affordable levels  a unified price in all GWP  Prices for non-agricultural use (e.g. green areas or play courses) are considerably higher, reflecting the financial cost.  Overconsumption charges are applied for the quantities exceeding the yearly permissible; multiple of the regular price  strong barrier to overconsumption  Despite the price reform in 2004 and the considerable price increase no change in the consumers’ behavior in the GWP could be observed with regard to water usage  Prices for recycled water are set to considerably lower levels despite the high cost  environmental benefits from the use; enter in the water balance; motives to use.
  14. 14. Irrigation Prices (GWP) 2004 to date Description / Use Price (€/m3 ) GWP(Surface&Groundwater) To Agricultural Organisations for agricultural production 0.15 To individuals for agricultural production 0.17 For industrial consumption 0.19 For animal husbandry consumption 0.17 For consumption after overflow 0.05 For irrigation of football and golf courses 0.34 For irrigation of other sports places, hotels and house gardens 0.34 For fish breeding 0.17 For over consumption (if quantity exceeds the annual approved by more than 10%) 0.56 Other prices/ rates Fixed yearly rate (€/ha) 17.10 For connection: Water meter (€/meter) 68.00 For connection: Filter (€/filter) 5.00 For reconnection 25.50 RecycledWater To Agricultural Organisations for agricultural production 0.05 To private individuals for agricultural production 0.07 For sports activities 0.15 For irrigation of green spaces, parks and hotel gardens 0.15 For irrigation of golf courses 0.21 For abstraction from groundwater aquifers, which have been enriched with recycled water
  15. 15. Cost assessment (Art. 9)  A special study was undertaken (2008-2010) to re-estimate the total water service cost (financial, environmental & resource costs)Cost Assessment (in 2007 prices) Unit Cost (€/m3 ) Within GWP Outside GWP Domestic Financial 1.17 (96%) 1.00 (89%) Environmental 0.04 (3%) 0.03 (3%) Resource 0.01 (1%) 0.09 (8%) Total 1.22 (100%) 1.12 (100%) Irrigation Financial 0.34 (76%) 0.30 (61%) Environmental 0.10 (22%) 0.16 (33%) Resource 0.01 (2%) 0.03 ( 6%) Total 0.45 (100%) 0.49 (100%) Sewage Financial 1.21 (100%) Environmental - Resource - Total 1.21 (100%) Recycled Financial 0.15 (65%) Environmental 0.08 (35%) Resource - Total 0.23 (100%) Cost recovery level (2005-2007) Within GWP Outside GWP Domestic 99% 75% Irrigation 41% 61% Sewage* 227% Recycled 38% * High levels of cost recovery due to sewage charges, prepaid by consumers that contribute to revenues. Cost Recovery = Revenues / Costs Source: WDD, 2011
  16. 16. Proposed Irrigation Prices in 2011  For GWP keep the two part tariff system: fixed cost plus variable volumetric charge  Fixed annual cost to increase 17.10  61.10 €/ha  Volumetric change to increase from 0.17 €/m3 (41%) in 2010: 0.24 (54%) in 2011  0.26 in 2013  0.28 (72%) in 2015  Same rates for livestock and fish breeding  Full cost recovery (i.e. 0.45 €/m3) for all other irrigation uses  Recycled: introduce two part tariff  Fixed cost 0  49.60 €/ha  Volumetric change to increase from 0.07  0.18 €/m3 (88%)  For irrigation outside GWP:
  17. 17. In practice…  On top of the WFD transposition to national legislation (Law 13(Ι)/2004), the WFD’s full cost recovery provisions on water pricing were included in Regulation 128/2014 (linked to the above mentioned Law)  In practice, the proposed prices have not been activated yet  Political cost  Economic downturn 2013-2015  Reaction from farmers  Decreasing farming activity  Technical difficulties Source: Cystat, 2017
  18. 18. Public consultation (2009-2015)  Public participation in environmental matters is something new for the Cypriot society  The public consultation in the 1st implementation cycle (2009-2015) consisted of multiple meetings of authorities with a broad range of stakeholders  consumer associations, farmer associations, local authorities, academics, environmental NGOs, etc.  These meetings served as information events for the River Basin Management Plan  Although the public had the chance to raise concerns, there was not much engagement by the civil society in the design of pricing instruments; most participants opposed the proposed pricing  Only environmental NGOs and some academics supported
  19. 19. Public consultation (2016-2021)  Merged public consultations for the WFD with the FD  The process became even more lengthy; difficult to keep people’s attention for a full day.  Although the necessary procedures outlined by the EU were overall satisfied with the process, these meetings were not as widely attended.  The approach was more top-down compared to the public consultation for the 1st cycle  loss of enthusiasm, limited staff and budget following the economic crisis, etc.  In general, a more participatory approach is needed for the public consultation process.
  20. 20. New Regulation 48/2017 Description / Use Financial Env& Resource Total (€/m3) GWP(Surface&Groundwater) To Agricultural Organisations for agricultural production 0.10 0.02 0.12 To individuals for agricultural production 0.15 0.02 0.17 For industrial consumption 0.23 0.02 0.25 For animal husbandry consumption 0.15 0.02 0.17 For irrigation of football and golf courses 0.34 0.02 0.36 For irrigation of other sports places, hotels and house gardens 0.21 0.02 0.23 For fish breeding 0.15 0.02 0.17 For over consumption - agriculture 0.45 For over consumption - other uses Double Fixed yearly rate (€/ha) 24.00 For connection: Water meter (€/meter) 200.00 For connection: Filter (€/ha) 50.00 For reconnection 20.00 Recycled To Agricultural Organisations for agricultural production 0.01 0.01 0.02 To private individuals for agricultural production 0.06 0.01 0.07 For industrial consumption 0.15 0.02 0.17 For sports activities 0.10 0.02 0.12 For irrigation of green spaces, parks and hotel gardens 0.15 0.02 0.17 For irrigation of golf courses 0.15 0.08 0.23 For over consumption Double
  21. 21. New Regulation 48/2017  The new regulation will be implemented as of April 10th 2017  For GWP, fixed price increased, but volumetric price remain unchanged or lower  But, for the first time the type of cost are distinguished (financial, environmental & resource)  The new regulation imposes the environmental and resource cost for the first time to private (mostly groundwater) consumers:  0.01 €/m3 for agricultural use, 0.02 €/m3 for gardens, 0.10 €/m3 for industry and hotels  If volumes are not metered, charges will be imposed either by area, crop type, or time of irrigation; billing on annual basis  Volumes abstracted will require prior approval by WDD  relevant also for cross compliance with RDP funds and agricultural subsidies
  22. 22. Summary  Cyprus is the most water-stressed nation in Europe  Water supply is enhanced by non-conventional resources  Groundwater over abstraction and aquifers’ deterioration is severe. Although easily accessible, it is not anymore a secure water resource.  Volumetric water pricing has been used for many decades.  Full cost recovery applies to domestic water use – high acceptance  Irrigation water pricing within GWP is metered & changed but below FC  Private groundwater pumping until now uncharged  effectiveness of the new regulation remains to be assessed in practice  Although there are water use efficiency measures at the farm level, there is room for improvement  smart irrigation technologies, crop diversification, etc.  Affordable irrigation pricing  further incentives for water savings?  A more participatory approach is needed for the public consultation
  23. 23. Reference  Cystat (2017). Statistical Abstract 2015. Nicosia, Cyprus.  Charalambous, K., Bruggeman, A., Giannakis, E. and Zoumides, C. (2017). Improving public participation processes for the Floods Directive and flood awareness: Evidence from Cyprus. Journal of Flood Risk Management (under review).  Eurostat (2017). Water exploitation index. URL: http://ec.europa.eu/eurostat/en/web/products- datasets/-/TSDNR310  WDD (2011). Cost assessment and pricing of water services in Cyprus – Summary. WDD, Nicosia, March 2010.  WDD (2017) Statistical Data. URL: http://www.moa.gov.cy/moa/wdd/Wdd.nsf/statistics_gr/statistics_gr?OpenDocument  Zoumides, C. and Zachariadis, T. (2009). Irrigation Water Pricing in Southern Europe and Cyprus: The effects of the EU Common Agricultural Policy and the Water Framework Directive. Cyprus Economic Policy Review, Vol. 3(1): 99–122.  Zoumides, C., Bruggeman, A. and Zachariadis T. (2012). “Global versus local crop water footprints: the case of Cyprus”, in Zhang et al (eds.) Solving the Water Crisis: Common Action Toward a Sustainable Water Footprint. Value of Water Research Report Series No. 60, UNESCO-IHE, pp. 7-27.  Zoumides, C., Bruggeman, A., Hadjikakou, M. and Zachariadis, T. (2014). Policy-relevant indicators for semi-arid nations: The water footprint of crop production and supply utilization of Cyprus. Ecological Indicators 43, pp. 205-214.  Zoumides, C., Bruggeman, A., Zachariadis, T. and Pashiardis, S. (2013). Quantifying the poorly known role of groundwater in agriculture: the case of Cyprus. Water Resources Management
  24. 24. Thank You Christos Zoumides, PhD Energy, Environment and Water Research Centre The Cyprus Institute P.O.Box 27456, 1645 Nicosia, Cyprus Tel. +357 9987 3748 Email: c.zoumides@cyi.a.c.cy
  • KristiYamamoto

    Dec. 4, 2021

This presentation was given at IEEP's capacity building for environmental tax reform conference on 5 October 2017 in Brussels, Belgium. Speaker: Christos Zoumides (The Cyprus Institute)

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