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Opportunity Costs of Ensuring Sustainability in Urban Water Services

Author

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  • Francisco Sáez-Fernández
  • Francisco González-Gómez
  • Andrés Picazo-Tadeo

Abstract

This paper assesses technical performance in the water industry in the Southern European region of Andalusia, while accounting for sustainability in the management of water. This allows the opportunity cost of producing sustainability to be evaluated. Given the low cost of raw water in Spain in relation to the estimated opportunity cost of saving this natural resource, wasting water becomes a profitable strategy for utility managers from a private perspective. However, this managerial strategy has a huge social cost in an area of Europe where the sustainable management of water is a pressing need. The conclusion is that environmental policy aimed at discouraging this wasteful behaviour is urgently needed. For this reason, a suitable mix of environmental taxes on water abstraction and institutional reforms is proposed.

Suggested Citation

  • Francisco Sáez-Fernández & Francisco González-Gómez & Andrés Picazo-Tadeo, 2011. "Opportunity Costs of Ensuring Sustainability in Urban Water Services," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 27(4), pages 693-708.
    • Handle: RePEc:taf:cijwxx:v:27:y:2011:i:4:p:693-708
    DOI: 10.1080/07900627.2010.548316
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    Cited by:

    1. van den Berg, Caroline, 2014. "The drivers of non-revenue water : how effective are non-revenue water reduction programs ?," Policy Research Working Paper Series 6997, The World Bank.
    2. van den Berg, Caroline, 2015. "Drivers of non-revenue water: A cross-national analysis," Utilities Policy, Elsevier, vol. 36(C), pages 71-78.

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