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date: 25 June 2022

Water Tariffs in Spainlocked

Water Tariffs in Spainlocked

  • Fernando ArbuésFernando ArbuésUniversity of Zaragoza, Department of Public Economics and Institute of Environmental Science
  •  and Marián García-ValiñasMarián García-ValiñasUniversity of Oviedo, Department of Economics

Summary

In the current context of climate change, water scarcity has become the center of an intense debate in recent years. Spain is a country affected by strong regional differences in terms of weather; thus, the quality and availability of water resources vary widely depending on the area, and the country is plagued by droughts and problems with water quality. Nevertheless, urban water prices in Spain are among the lowest in the European Union. Moreover, it is a federal country where subcentral governments (regional and local) are autonomous entities with different responsibilities in the design of water policies. The extremely atomized local panorama and the strong power of the regional governments have led to a highly complex system with a wide range of water price levels and structures. Since the heterogeneity is so great, this article focuses on the tariffs related to the water supply service in the 15 largest Spanish cities. In general, urban water tariffs commonly distinguish between residential and non-residential users. Additionally, there are usually specific tariffs for different customer categories within both residential and non-residential users, which are not always justified in terms of the equity principle. It is important to note that in most cities the eligibility criteria for these special tariffs usually add more complexity to the tariff system and adversely affect horizontal equity. All these factors contribute to the great complexity of Spain’s water-pricing map. The heterogeneous tariff system found in most Spanish cities runs counter to equity principles and can send the wrong signal to users about water scarcity, thereby hindering compliance with the resource sustainability objective. Thus, most Spanish cities require a simplification of the tariff system.

Subjects

  • Health Services Administration/Management
  • Public Health Policy and Governance

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