Water Resilience for Economic Resilience in Spain: A Critical Crossroads
by Carlos Mario Gomez Josefina Maestu (University of Alcalá)
Key Messages
Spain's economy is significantly dependent on natural resources, particularly water, the availability of which is progressively decreasing due to climate change.
Climate change projections indicate a gradual decline in water resources and heightened climate variability, including increased frequency and severity of droughts and floods. This is coupled with escalating temperatures, greater evaporation losses, and an increased demand for water in irrigation and agricultural applications.
The economy of southern Spain is strongly reliant on agriculture and tourism, both of which require the scarce water resources that are under threat from climate change. Tensions emerge between agricultural expansion and other industries, such as tourism, biodiversity preservation, energy generation, and urban applications.
The energy sector, especially hydroelectric and biomass, faces significant vulnerability to water availability challenges. Uncoordinated reactions to water insecurity are undermining resilience against future disruptions while water diversification initiatives such as transfers and groundwater utilization have inadvertently intensified water insecurity and diminished water resilience.
Desalination and wastewater reuse exhibit promise; however, they are impeded by substantial costs and preferential treatment towards freshwater sources.
The growth of Spain's economy has relied on extending water supply facilities and infrastructure, which have underperformed. Water management organizations are adapting to enhance water distribution, entitlements, and cross-sector collaboration, aiming to harmonize economic and environmental requirements.
Introduction
Spain is a relatively affluent economy that has relied heavily on natural resources throughout its history. The case for water reliance in Spain refers to an overarching adaptation problem of managing a unique resource with limited (when not diminishing) supply, set against the backdrop of increasing uncertainty due to climate change. The scope of changes experienced is already intense and potentially irreversible. Some aquatic ecosystems may become unable to continue to carry out their current functions, including services such as water provision that are integral to the economy itself (Marshall, 2013).
Spain is certainly at a crossroads for water that needs to be given high priority by economic decision makers. The structure and stability of the economy is at stake, affecting economic sectors in different ways depending on their location.
Climate change scenarios, despite their uncertainty, point to a progressive reduction of water resources in Spain. In the worst-case scenario, an approximately 24% reduction in average river flow is forecast for the end of the century with respect to the reference series 1961-2000, with possible reductions from 30–40% in the most sensitive areas. The reduction in aquifer recharge is estimated in similar proportions (NCCAP, 2020). There is also a substantial decrease in snow reserves that naturally regulate the water cycle.
All studies also predict an increase in climate variability. This points to an expected increase in the risk of droughts, which will be more frequent, longer, and more intense, and floods, with more frequent swells and higher peak flows (NCCAP, 2020). Episodes of torrential rain may be accompanied by geomorphological imbalances in basins, which may lead to a more accelerated siltation of reservoirs, with the consequent reduction in their capacity, accentuated by the need for flood mitigation measures. It is expected that 50% of flood-prone areas will be worse off. Furthermore, hydraulic infrastructures have been designed with safety margins that, in some cases, could be exceeded because of climate change
Rising temperatures will also increase evaporation losses from reservoirs, which could double in the coming decades. The increase in evapotranspiration because of increases in temperature, together with the possible extension of the irrigation season, will lead to more demand for irrigation and agricultural uses, which already account for more than 70% of total demand in Spain.
In addition to agriculture, the energy sector is highly exposed due to its dependence on water availability. The expected impacts are relevant, and of a negative nature, in the hydro and biomass sectors. A significant reduction in hydroelectric production is expected as a consequence of reduced river flows.
The negative consequences of spontaneous, individual, reactive and unplanned responses to water insecurity are already visible in the most water stressed parts of the country. The main examples are the race to exhaustion in the use of groundwater, the illegal water markets, and the investments in new irrigation projects, whether legal or unauthorized. These responses to more scarce and more uncertain water resources can only come at the expense of reducing resilience to existing uses and future shocks. A planned, anticipated, and coordinated response is a basic precondition to restore the water resilience of important regions of the Spanish economy.
Water Exploitation in Spain
All Spanish basins suffer a certain degree of water stress. Around half of the Spanish territory, the Mediterranean basins, and Atlantic Andalusia currently suffer from severe water stress, which, combined with the typical irregularity of the Mediterranean climate, entails significant exposure to droughts.
The most serious case is that of Segura where “normal” demand is 132% of average annual resources, despite the contribution of transfers from other basins, desalination, and direct and indirect reuse. These extremes do not hide the high exposure of the severely water-stressed basins of the Jucar (95%), the Guadiana (62%), the Ebro (59%), and the Guadalquivir (55%) (Pulido-Velazquez et al., 2021; Marcos-García and Pulido-Velazquez, 2017).
Water in “the Model” of Economic Development
Water has always been a critical factor in Spanish economic development. Despite low and variable rainfall throughout its history, Spain has been able to harness the potential of water for economic development mostly for agriculture, power generation, tourism, and urban development. The other side of the coin is that the Spanish economy, and more particularly its most competitive areas (and those that have proved to be more resilient to the current world economic crisis such as agriculture and tourism) are heavily exposed to changes in availability of water resources.
Freshwater sources in Spain are intensively used, mostly in the most water scarce areas where populations and the most water-intensive activities tend to concentrate (Pulido-Velazquez et al., 2020). In all these places, local incentives and comparative advantages have triggered expansions in water demand that cannot be met with the renewable resources at hand. This is the case of the Mediterranean basins in Spain that require, on a regular basis, a quantity that largely exceeds their long-term water renewable resources. Under these conditions of water development, a binding condition for economic progress has required comparatively higher levels of infrastructure investment and sophisticated institutional arrangements from the onset.
Infrastructure has generally expanded water supply services everywhere and at the required volumes, widening opportunities, reducing production costs, and providing water, energy, and food security while allowing for the concurrent progress of all other sectors in the economy (Cook and Bakker, 2009; Grey and Sadoff, 2007; Vörösmarty et al., 2021). Gradually, the marginal return of projects has decreased as the supply of water is more or less taken for granted and waterborne (and other water-related) risks are abated.
Few other places in Europe offer more convincing evidence of the importance of water for economic progress. Harnessing the productive potential of water has traditionally been a major challenge for economic development in most of the Spanish territory. Apart from the Atlantic catchments in the North, Spain presents all the features of a semi-arid Mediterranean climate with low rainfall (85% of the EU average (EEA, 2014)) and a high potential evapotranspiration (amongst the highest in the continent) that make this country the most arid in the EU, with an annual runoff half the EU average (CEDEX, 2017). High inter-season and inter-annual variability increases the management complexity of Spain’s hydrological resources.
Historically, the main strategies of river basin authorities have focused on supplying water services to support areas of the economy including population change, urban growth, irrigation development, manufacturing activities, etc. The main objective of water policy consisted of finding inexpensive and reliable means to meet water demands.
Infrastructure was designed, built, and operated with the best knowledge at the time and assuming the normal variance of precipitation patterns around normal or average levels of rainfall. With the benefit of hindsight, ex-post evaluations show all water storage systems have performed below expectations for two main reasons: the lack of coordination across sectors and the overestimation of future water resources.
Addressing water scarcity has involved incentives to increase water availability by transferring water from further away territories. Paradoxically, water transfers have been more successful in increasing water demand than in increasing water resilience in water-scarce areas. They have also performed below expectations in adding more water to the balance. More recently, water desalination has become part of the supply mix. Installed capacity today is at 5 million m3 per day. Desalinated water is used as a buffer stock during drought events.
Water institutions have evolved throughout time while dealing with issues such as water allocation, definition, and enforcement of water use rights (Mathews et al., 2022; Grey et al., 2013). Other focal areas of water institutions include making norms, providing basic water services, monitoring water quality, developing technical skills, and coordinating investments as part of a progressive strategy of economic development (Garrick et al., 2019). This supply-oriented modus operandi is currently in a transition towards a new one aimed at making all water services used by the economy consistent with the preservation and adequate protection of the ecological status of water bodies.
The importance of water as an economic asset for the different sectors of the economy
Agriculture comparative advantages
The Spanish economy has many different competitive advantages in specific sectors. In agriculture these advantages include a relative abundance of arable land. Spain has 261,000 km2 of agricultural land — the largest in the EU only after France — representing 52.9% of the total area as compared to the EU average of 43% (EUROSTAT, 2022). Spain also benefits from an above-average amount of daylight hours and below-average labor costs (in terms of the EU). It is also partly explained by an elastic labor supply fed with immigration for many years. Still, water is the most critical and scarce factor for agricultural production.
The economic importance of agriculture is higher in water-stressed areas
The export-oriented commercial agriculture that dominates water-scarce Mediterranean basins in Spain requires more and more sophisticated inputs and labor skills, follows modern entrepreneurial practices, and supplies basic commodities to a complex and competitive agrifood manufacturing and logistics industry. On the contrary, traditional agriculture requires limited labor and manufactured inputs. Its management practices do not demand sophisticated commercial and financial services and its output does not feed complex industrial processes or supply chains. It has other benefits for biodiversity conservation and leisure activities, including tourism.
Since water is the main driver of the transformation of the agricultural model, this in turn has become the basis of a complex economic structure. In regions like Andalusia or Murcia, the direct contribution of agriculture to the regional output and employment (4.2% and 4.5%, respectively) might be low (although higher than average), but its indirect and induced impact over the whole production chain make it the central piece of the existing income and employment opportunities. For example, in Andalusia it is estimated that every additional euro generated by the sector generates two euros in the economy (output multiplier), and one job is created for every EUR 25,000 of additional output generated by the sector (Perez Blanco et al., 2010). In addition, this water-dependent sector has also performed better than the overall economy during recent crises. The employment share of agriculture in Murcia, Andalusia, and Valencia grew from 6.9%, 8.4%, and 2.8% in 2008 to 7.4%, 10.4%, and 2.9% in 2011, respectively. As a stark example, during this period agricultural employment in Murcia grew by 10.6% while the total employment rate declined by 10.6% overall.
Publicly coordinated water investments are associated with significant scale and scope economies (see for instance González-Gómez et al., 2014, for domestic water services). In other words, the social and economic returns of water development (indirect productivity) in the early and intermediate stages of water development are substantially higher than financial returns as perceived by individual users (apparent productivity). Economic returns of water development for parts of the Andalusia Region may be 3.1 times larger than its financial returns in the case of water for irrigation (92% of water consumption). In turn, this economic growth powered by water investments has the potential to induce significant water savings in the case of the manufacturing industry (Molinos Senante et al., 2021).
There are substantial differences in the productivity of the irrigation systems in water-scarce regions and those in relatively abundant regions. This explains the significant differences in the technical efficiency ranging between 81% for the Andalusian Mediterranean River Basins and 69% for the Guadalquivir River Basin compared to those of the relatively water abundant northern basins (between 53% in the Galicia Coast River Basin and 57% in the Ebro River Basin) (ESYRCE-MAPA, 2020).
Changes in irrigation techniques have been significant during the last decades. This has improved productivity. In 2002, gravity irrigation represented 40.5% of irrigated surface, sprinkler irrigation 18.4%, and drip irrigation 34.3% (other irrigation systems accounted for 6.9% of irrigated lands); by 2020 the more efficient drip irrigation already represented 54%, sprinkler irrigation 23%, and gravity 23% (ESYRCE-MAPA, 2022).
Competitiveness of Tourism
In 2021 Spain was the number one destination in Europe for international tourism with a share of 15% of the total number of nights spent in tourist accommodation establishments across the EU (EUROSTAT, 2023). The number of international tourist arrivals in Spain for 2022 was 71.6 million (INE, 2022). The economic boom of the last decade boosted the availability of rooms (which grew by 32.1% since 1999 until the sudden decline of the economy in 2008) (INE, 2014) and second residences (which grew by 87.7% in the period 2001–2011) (INE 2020). In 2022, the number of people affiliated with Social Security from the tourism industry amounted to more than 2.4 million, or 12.2% of the total (TUESPANA, 2023), a figure that reflects its importance in the national economy.
The direct contribution of the tourism sector to the Spanish economy was EUR 97.1 billion (8% of GDP in 2021). It included 2.3 million jobs, or 11.4% of employment in Spain (INE, 2022). Employment is even higher (up to 18%) when considering all inputs and the complementary services used by this industry (IET, 2020).
Tourism is concentrated in the dry season (i.e., summer months) and in the most water-scarce areas. This season coincides with the holiday period of European visitors. Almost 70% of total tourism is concentrated in the islands and the Mediterranean coast. Two of the main mass tourism destinations in Spain (and the first and fourth top 20-European tourism destinations in terms of nights spent), namely the Canary and the Balearic Islands, do not have permanent rivers.
The development of storage and desalination infrastructures combined with groundwater has provided a reliable supply of water services, which is a critical input for tourism and for the development of accommodation and amenities such as swimming pools, gardens, and golf courses. There has also been an increase in the demand of complementary services in the tourism package, such as food and beverage, travel agents, transport, banking, and other economic activities that help sustain the local economy.
Increasing competition for water resources along with reductions in water availability and pollution from intensive agriculture production — which has developed in the same regions of Spain as those preferred as tourist destinations — are already leading to financial losses in the tourism sector. This is the case in the area of the Mar Menor. The Bank of Spain estimated that home prices in the Campo de Cartagena area diminished 45% in real terms since 2016 due to the ecological crisis of the lagoon (BDE, 2021). The Bank calculated a wealth loss of EUR 4,150 million in the region as compared with a scenario without the ecological crisis.
Energy production valuable but below expectations
The Spanish economy required 75 years and considerable resources to develop the existing hydroelectricity capacity. The installed potential is 16,000 Gigawatts. This is a remarkable record. But if we look at the actual electricity produced, it may seem a complete failure. After 75 years of hydroelectricity development, the whole system is only able to produce a fraction of the energy that was produced 75 years ago when these infrastructures were not in place. The difference is that back then there was water.
The general conclusion after 75 years is that the remarkable development of hydropower has been more effective in maintaining the production of electricity than in increasing or even stabilizing electricity production. This outcome would have been different if hydropower development had been coordinated with agricultural and urban development, reducing the need of heavy infrastructures and coordinating water demands. With time, once the margin for new infrastructure to ensure water supply has been narrowed by decreasing returns, this option to improve water resilience cannot be an option.
Pathways Toward a Water-Resilient Economy
The objectives of the water transition to a resilient and sustainable pathway in Spain are still a matter of discussion and will require reaching political agreements, as well as coordination of different policy areas.
Decoupling the economy: Structural transformation of the economy
With the existing resource constraints and overall generalized impacts on water, Spain cannot continue growing with the same rates of intensity of water use in the economy. It is essential to decouple growth from increases in the demand of water. To do this, the relative importance of the different sectors has to change, especially in those regions where climate change is going to affect the availability of water resources the most.
To date, the Spanish economy has not been successful in decoupling economic growth from water use. Although water use per capita has remained stable (770 m3/capita/year in 2009 according to OECD (2012)), some river basins still use water in excess over long-term renewable resources. For instance, the Guadalquivir and Segura River Basin’s ratios of water abstraction over renewable resources are 1.64 and 1.27 according Pulido Velazquez, et al. (2021) and the projections envisaged in the River Basin Management Plans do not show a change in this pattern. Although water demand in the Segura in 2021 was be very similar to that of 2009 (1,762.1 instead of 1,779.1 million m3), water use is expected to grow by 5.2% (from 2,892 to 3,046 hm3) in the Tagus River Basin, which supplies 17.3% of total water demand in the Segura (SRB, 2020).
Technological investments in decoupling the economy from water use have not always been successful. The National Irrigation Plan (2008) expected to be able to advance decoupling with projected savings of 3,662 hm3/year and an investment cost of EUR 7.368 million (López-Gunn et al., 2012).
The overall conclusion is clear. To contribute to decoupling and to transition into a water resilient economy, water savings need to be transformed.
The drive of public budgets towards investing in infrastructure needs to be re-evaluated
The perception of water development and water investments generating economic growth as a key factor for rural development has led to the construction of bulky infrastructure designed to use resources as much as possible.
More needs to be invested in taking care of the existing resources or in protecting the water that is required for infrastructure to function properly. This requires an economic evaluation of water infrastructure decisions, comparing, for example, the cost-benefit ratios of different alternatives and analyzing their macroeconomic impacts. Benefits and macroeconomic impacts cannot be taken for granted.
There are other investments such as the protection of existing resources (and specially groundwater) and the diversification of water sources that are an opportunity to match water supply and demand while facing the deep uncertainties of climate change. They contribute to the goal of curbing water scarcity and provide an adaptive response to uncertain water supplies — provided that affordability concerns are addressed and adequate incentives are established.
Building a sustainable water portfolio requires rewiring policy decisions in the long term and making clear decisions over the size and composition of the water portfolio. Different sources of water should play different roles in the long term. Those decisions over the optimal water portfolio, prioritized on explicit economic criteria, need to be part of the adaptive policy pathways of the water transition.
Investing in a resilient future: Investing in co-benefits makes economic sense
Protection of groundwater must be a priority, not only because it is the most vulnerable resource due to the deterioration of its quality and increasing overexploitation, but also because it is a strategic resource for water management in situations of drought. It plays a fundamental role in the maintenance of aquatic ecosystems, providing the base flow of river systems. Its deterioration jeopardizes the environmental status of rivers and endangers the sustained provision of water services.
Increased groundwater depletion has opportunity costs. It is becoming unavoidable to invest in the much more expensive non-conventional water sources to ensure excess capacity in times of drought. This has effects in terms of costs of production, in the competitiveness of the economy, and opportunity costs in terms of allocation of the public budgets.
The recovery of the morphology and dynamics of watercourses is also an important investment for the future. It plays a key role in hydrological regulation and flood risk management. Actions such as nature-based solutions (NBS), sustainable urban drainage, including recovering meanders, reconnecting floodplains, renaturalizing watercourses, preserving wetlands, eliminating obstacles, promoting continuity, and recovering riverside forests should be promoted. These actions perform multiple functions and offer co-benefits such as reducing flood risk, improving biodiversity and the conservation status of ecosystems, recharging aquifers, protecting quality, reducing erosion, and improving soil structure.
Considering the marginal cost of the supplies to cope with droughts
Given the multiple uncertainties about water, it is important to recognize from the beginning that water transition would not be possible without adaptable policy pathways for harnessing the potential of opportunities to provide resilience to economic development. Flexibility could be facilitated by contingent and flexible water allocation rules for adapting water demands to available resources across time and space, improving adaptability while preserving the objectives of the water transition.
Diversification of water sources when properly designed and implemented could serve the objectives of the water transition. Water scarcity and the need to cope with more frequent droughts can be tackled with alternative sources at higher marginal costs (from reuse of reclaimed wastewater to desalination of brackish water and seawater). This is not a new option in Spain. Substantial improvement has been recorded regarding the increasing capacity to desalinate water. The installed desalination capacity is around 5 million m3/day and could potentially supply water for a population of 34 million inhabitants (Zarzo, 2020).
However, given the high cost of desalinated water, its effective use has been limited in quantity. Less than one-fifth of installed membrane capacity is actually used, and it is reserved only for more valuable uses (mostly drinking water) in particular during dry periods. Non-conventional water is then used mainly for emergency situations, posing additional challenges for its financial sustainability, while overexploitation of freshwater sources may go on.
Assigning a substantive role to desalinated water in the supply portfolio is still a pending and a highly controversial issue. In practice, due to its relatively high cost, this source is reserved as a buffer stock for emergencies (i.e., droughts). This improves resilience to droughts although it represents a real challenge to the financial sustainability of operating plants.
Creating incentives to protect and conserve the resources we have
In the “business-as-usual” scenario, the incentives in place lead to the destruction of the cheap and easily available reserves of groundwater resources, which paradoxically are the most valuable as strategic reserves for the future. They are the ones best suited to act as buffer stock during droughts and to provide water security.
Water is a sector where scarce and unreliable goods are priced lower than their abundant and reliable substitutes, unlike microeconomic theory would suggest. In the business-as-usual scenario, continuous depletion of groundwater sources will take place until extracting reaches the price of alternative sources, even if alternative resources are available. There is then a pricing failure which translates into incentives in such a way that users prefer financially cheap but scarce and unsafe water sources rather than the financially expensive but relatively abundant and reliable alternative water sources. Should the problem not be recognized, the unavoidable transition from financially cheap to more expensive water sources would induce significant harmful effects on the environment and the economy. The real question is then how to preserve the “cheap” but most “valuable” resources, given that the baseline scenario can easily be anticipated, considering the incentives in place.
Considerable progress has been made thanks to the drought management plans in Spain. To some extent, they made drought response anticipated (rather than discretionary and reactive) and planned (rather than improvized) but needed to tackle the real problem: the control over an important part of the available water resources. Furthermore, higher constraints may also lead to higher incentives for over-abstraction, thus leading to lower buffer stocks and higher drought risk. These are clearly unwanted outcomes.
What incentives then may need to be established to provide water security so as to guarantee the resilience of the economy? How can incentives be created so that surface water abstractions by water users will remain close to renewable runoff (considering environmental flows) and demand in excess will be met from groundwater — exploited under unsustainable patterns but still less expensive than non-conventional sources?
The “use it or lose it” kind of incentives occur when farmers and other agents perceive the value of water but do not have any alternative to using it. This increases or sustains water demand, even when it is greater than long-term water supply. Prevailing incentives push sectoral demands up and make it difficult to close de facto the river basins to accommodate current uses within the range of available water resources. Perversely the “use it or lose it” framework may mean that new infrastructure is executed to consolidate the right to use local water resources.
Incentive and pricing schemes for a water-resilient economy
In this context it is important to make clear that water prices, subsidies, fees, and other financial instruments are not inherently good or bad but are simply instruments or means to the ends of water policy. Indeed, these instruments should provide the revenues needed to the financial sustainability of the provision of valuable water services. In addition to that, from an economic and policy standpoint, they should promote the behavioral changes needed for the water transition towards a water-resilient economy and discourage actions that harm water resilience.
The most important water policy challenge nowadays still consists of aligning the multiple individual decisions on using and preserving water with the common societal goals of paving a transition towards a resilient economy. In most cases what is rational from a private point of view is not necessarily such from a social or economic perspective.
Significant progress has been recorded so far in adapting water prices and making cost recovery of operational and capital expenditures more transparent. However, this progress refers mainly to urban water services.
Water prices are low when compared to the cost of marginal resources. Further progress is required in covering resource costs (in particular that relate to water scarcity) and environmental costs. There are frequently no adequate incentives for farmers to use water efficiently as water consumption is, to a large extent, not metered and therefore water charges are not linked to real consumption. There is evidence to show that farmers are reluctant to pay more for water. But contrary to perceptions, they report in some studies to be willing to pay an excess price between 0.16-0.18 €/m3 for water security (Sala Garrido et al., 2020).
Self-abstraction is not charged. The energy cost of withdrawal in some cases provides an adequate incentive to halt overexploitation. In others, it has not been high enough to prevent, for example, environmental external effects on wetlands and other protected areas.
When water supply reduces and it is increasingly uncertain, individuals are more willing to pay for water security. They might actually be willing to transform their productive system in order to use less water and reduce its exposure to water shortages. This can include a shift towards crops that are less vulnerable to water deficits or, for example, they might be willing to pay for an insurance policy covering drought losses (Perez Blanco and Gómez, 2014). In this context, the role of pricing and cost-recovery mechanisms (as financial instruments to ensure the right incentives are in place), is still of paramount importance. Prices should actually make the best out of current opportunities through bridging efficiency gaps, inducing shifts towards less water-intensive activities, and using alternative supply sources to mitigate scarcity and increase the water resilience of the economy.
Economic activities and cities must be rewarded for contributing to water resilience and charged for worsening water security. Prices need to be designed as part of a decision-making architecture to lead people to make decisions that are consistent with an overall objective of economic resilience and environmental improvement.
Improve the existing insurance schemes
Actually, the main source of farmers’ security is groundwater. Nature is paying the price of farmers’ exposure to droughts. Production during drought years has been sustained at the expense of groundwater over-exploitation. Moreover, the prices of agricultural products have been seen to increase during droughts, leading to greater benefits for farmers.
However the financial system may be a better option than the overexploitation of groundwater during droughts. Some alternatives are being considered. Developing new insurance schemes, such as a drought insurance, might be a means to make the financial system stand up to preserve local income in drought-prone areas and make a real contribution to recover critical groundwater assets by freeing them of the duty of serving as income security instruments.
Use subsidies wisely: Getting subsidies right
The role of incentives is critical to deal with the affordability concerns arising anytime a new solution with the potential to contribute to the water transition comes into play. These concerns are the most visible barriers to the extended use of desalinated water, the adoption of water efficient devices, and the adoption of NBS and other water conservation practices in cities and rural areas.
Many alternatives can be used to overcome affordability barriers, but all of them should be implemented on the condition that the beneficiaries make a sizable contribution to the water transition. Similar to the energy transition and to the EU Green Deal, all the financial instruments to overcome affordability concerns should be integrated into a just transition strategy.
No doubt, affordability concerns need to be managed as a critical component to make the water transition politically acceptable in water scarce areas. But, dealing with affordability by subsidizing water services may increase water use and extend tensions to these new sources. In other words, subsidies make sense in a process of transition when they reduce pressures on over-exhausted water bodies (e.g., groundwater) or when they protect wetlands and biodiversity — providing co-benefits to the economy and society in a pathway towards more sustainable water use.
In relatively water-abundant areas, subsidies to capital costs of infrastructure and water supply systems lead — in a mature water economy like Spain — to the use of water in very marginal lands. This can create environmental impacts and reduce resilience of all other existing or potential uses for very little contribution to the economy. In individual plots, low water prices have resulted in production systems using water intensively, with returns on investments below the capital and operating costs of the infrastructure, without generating locally the types of economic spinoffs that may have justified these investments.
Increasing resilience for farmers needs to make financial sense
The agricultural sector does not only suffer the impacts of climate change, but its own practices can be a cause of increased vulnerability. There are practices and measures that can minimize this vulnerability, including:
regenerative agriculture
hydrological-forestry restoration in areas at high risk of erosion
promotion of native forest crops to replace agricultural crops in flood-prone areas
crop rotation and diversification
maintenance of vegetation covers and the incorporation of pruning remains into the soil for woody crops
saving and efficiency measures aimed at reducing net water consumption
a commitment to crop varieties or livestock species that are better adapted to the impacts of climate change.
Promoting these practices requires financial incentives in irrigation planning as well as coordination of agricultural policy and hydrological planning. Some of these practices and measures have double benefits for climate change mitigation and adaptation: fixing CO₂ and acting as agricultural sinks. In Spain they have been included in the National Common Agricultural Policy Plan and in the National Integrated Energy and Climate Plan (2021–2030) together with other measures that promote the reduction of GHG emissions.
Conclusions
Water security has always been a defining challenge for Spanish economic progress. Perceptions of water security issues may have changed with time, from guaranteeing a minimum supply of water with the little resources available in the past to increasingly being able to respond to the irreducible uncertainties brought by climate change over future water supplies.
Many lessons can be learned from a century of water supporting economic progress in a country where water security has been a fundamental challenge. These lessons are relevant for providing new and more resilient responses to the emerging challenges of adapting to climate change while curbing the detrimental trends inherited from traditional water development and use. The ability to move towards a water-resilient economy and better respond to increased climate risk — a clear national economic and social priority given the water policy challenges — is determined by the ability to act and plan collectively.
REFERENCES
Banco de España (BDE). 2021. Informe de Estabilidad Financiera. OTOÑO.
CEDEX. 2017. Evaluación del impacto del cambio climático en los recursos hídricos y sequías en España. Madrid: MAPAMA.
Cook, C., and K. Bakker. 2012. “Water security: Debating an emerging paradigm.” Global environmental change 22 (1): 94-102.
ESYRCE-MAPA. 2020. “Survey of Crops’ Surfaces and Yields. Encuesta de Superficies y Rendimientos de Cultivos en España.” https://www.mapa.gob.es/es/estadistica/temas/estadisticas-agrarias/agricultura/esyrce/
ESYRCE-MAPA. 2022. Encuesta sobre superficies y rendimientos de cultivos. Análisis de los regadíos en España. ESYRCE 2021. Madrid: Ministerio de Agricultura, Pesca y Alimentación (MAPA).
EUROSTAT. 2022. “Farms and farmland in the European Union - statistics.” https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Farms_and_farmland_in_the_European_Union_-_statistics
EUROSTAT. 2023. “Nights spent at tourist accommodation establishments by NUTS 2 regions (online data code: TOUR_OCC_NIN2), year, 2021.” [last update 01/02/2023]. https://ec.europa.eu/eurostat/databrowser/view/tour_occ_nin2/settings_1/table?lang=en
Garrick, D. E., A. Chautard, and J. Rawlins. 2019. “Reallocating Water.” In Water Science, Policy, and Management: A Global Challenge edited by Simon J. Dadson, Dustin E. Garrick, Edmund C. Penning-Rowsell, Jim W. Hall, Rob Hope, Jocelyne Hughes. Wiley & Sons.
Gómez, C. M., and C.D. Pérez-Blanco. 2014. “Simple myths and basic maths about greening irrigation.” Water Resources Management 28: 4035-4044.
González-Gómez, F., M.A. García-Rubio, and J. González-Martínez. 2014. “Beyond the public–private controversy in urban water management in Spain.” Utilities Policy 31: 1-9.
Matthews, Nathanial, James Dalton, John Matthews, Holly Barclay, Jennie Barron, Dustin Garrick, Line Gordon et al. 2022. "Elevating the role of water resilience in food system dialogues." Water Security 17: 100126.
Grey, David, and Claudia W. Sadoff. 2007. "Sink or swim? Water security for growth and development." Water policy 9, no. 6: 545-571.
Grey, David, Dustin Garrick, D. Blackmore, J. Kelman, Mike Muller, and Claudia Sadoff. 2013. "Water security in one blue planet: twenty-first century policy challenges for science." Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences 371, no. 2002: 20120406.
INE. 2022. “Estadística de Movimientos Turísticos en Fronteras (FRONTUR). Diciembre 2022 y año 2022. Datos provisionales.” https://www.ine.es/daco/daco42/frontur/frontur1222.pdf
Lopez-Gunn, Elena, P. Zorrilla, Fernando Prieto, and M. Ramon Llamas. 2012. "Lost in translation? Water efficiency in Spanish agriculture." Agricultural Water Management 108: 83-95.
Marcos-Garcia, Patricia, and M. Pulido-Velázquez. 2017. "Cambio climático y planificación hidrológica:¿ es adecuado asumir un porcentaje único de reducción de aportaciones para toda la demarcación?." Ingeniería del agua 21, no. 1: 35-52.
Marshall, G. R. 2013. “Transaction costs, collective action and adaptation in managing complex social–ecological systems.” Ecological Economics 88: 185-194.
Molinos-Senante, M., and A. Maziotis. 2021. “Productivity growth, economies of scale and scope in the water and sewerage industry: The Chilean case.” PLoS One 16, 5
NCCAP. 2020. “Spanish National Climate Change Adaptation Plan 2021-2030.” https://www.preventionweb.net/publication/spain-national-climate-change-adaptation-plan-2021-2030
Perez Blanco, C. D., and C.M. Gómez. 2014. An Integrated Risk Assessment Model for the Implementation of Drought Insurance Markets in Spain. Fondazione Eni Enrico Mattei (FEEM).
Perez Blanco, C. D., C.M. Gómez, and R. Garrido. 2010. “Cambio estructural regional y agua: escasez, dependencia e impactos sobre el tejido económico.” El caso de Andalucía. Estudios de Economía Aplicada 28, 2: 423-446.
Pulido-Velázquez, Manuel, Alvar Escriva-Bou, and Héctor Macián Sorribes. 2020. Balance hídrico actual y futuro en las cuencas en España, déficits estructurales e implicaciones socioeconómicas. No. eee2020-38. FEDEA.
Sala Garrido, R., M. Molinos-Senante, R. Fuentes, and F. Hernández. 2020. Reutilización de agua: estado actual y perspectivas. Documento de Trabajo - 2020/09. FEDEA.
SRB. 2020. “ESQUEMA DE TEMAS IMPORTANTES de la Demarcación Hidrográfica del Segura.” https://www.miteco.gob.es/es/agua/temas/planificacion-hidrologica/planificacion-hidrologica/ETI_tercer_ciclo.aspx
Vörösmarty, Charles J., Ben Stewart-Koster, Pamela A. Green, Edward L. Boone, Martina Flörke, Günther Fischer, David A. Wiberg et al. 2021. "A green-gray path to global water security and sustainable infrastructure." Global Environmental Change 70: 102344.
Zarzo, D. 2020. La Desalación del Agua en España. Estudios sobre la Economía Española 2020-2022. FEDEA.