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This paper explores the impact on water demand of the adoption of deficit and precision irrigation as a farmer’s attempt to respond to water scarcity by maximising water productivity. The case study is characterised by the intensive use of deficit irrigation techniques in olive groves, which account for 50% of all irrigated land in southern Spain. These technologies have an important influence on the structure of the water demand. This study reveals that following the adoption of such technologies, water demand does not respond to moderate changes in water price, unless price increases become so great that they reach a threshold price representing a disproportionate and unaffordable social impact. This fact has significant consequences for water policy as water pricing becomes an ineffective instrument for managing water demand in a context characterised by resource scarcity and farmers’ adoption of deficit irrigation techniques.

This paper proposes a methodology to compute a cost recovery ratio directly from the System of Environmental-Economic Accounting for Water (SEEA-Water) standard tables. The methodology is applied to the Guadalquivir River Basin in southern Spain. Results illustrate that it allows cost recovery analysis in line with Water Framework Directive Article 9. Wider adoption of the methodology would enhance comparability and knowledge sharing between regions, countries and sectors both in the European Union and worldwide.

The hypothesis of a rebound effect as a consequence of water saving investments is taken analogically from the Jevons paradox models in energy economics. The European Commission (EC) alert about the consequences in water stressed regions that are investing heavily in modernization of irrigation networks and systems. This paper reviews the literature, linking water savings with water diversion and water depletion, both from theoretical models and empirical evidence from the published research. In order to increase knowledge of this phenomenon, a new empirical case study is presented based on a survey of 36,000 ha of recently modernized irrigated areas in the Guadalquivir basin (southern Spain). The results of the case study illustrates the conditions that may avoid rebound effect, although the results of the available empirical evidence and the published theoretical research are diverse and lead to contradictory results. Further research is therefore needed to determine the causes and solutions of water saving investment impacts and the possible speculative rebound effect.

The European Water Framework Directive (WFD) requires the good ecological status of surface water bodies, which implies the improvement of both their physicochemical condition, as well as their flow and continuity. The WFD prescribes the assessment of environmental and resource costs and benefits associated with implementing these improvements. The recent literature focuses almost exclusively on the assessment of the economic values related to quality aspects. However, in much of southern Europe, fulfilling the WFD goals will greatly depend on maintaining sufficient water flow, as well. This study aims to fill this gap by assessing the non-market value of allocating enough water to the environment to ensure environmental services are sustained when water is scarce. The non-market value of guaranteeing water supply for secondary household uses is also estimated. Using the Guadalquivir River Basin in Spain as a case study, a choice experiment is applied with scenarios characterized by varying water flow levels and accompanying environmental impacts, and a different frequency of household water restrictions. The results show that the population derives significant benefits not only from the direct use of water, but that also holds non-use values related to the ecological status, although the latter has a considerably lower impact on consumer surplus. Additionally, we conclude that the costs of implementing the water saving measures currently included in the Program of Measures seem to be proportionate to its benefits in this case.

This paper presents an application of residual value techniques to the economic analysis of irrigation water at the basin level for the Guadalquivir River (Southern Spain). The methodology is simple; the results are robust and consistent with alternative method findings. The average residual value in the basin is 0.31 €/m3 and according to the to Residual Value Method, the distribution of total Gross Value Added (GVA) of irrigated land is distributed between the different factors of production as follows: (i) water, 62% of GVA; (ii) land, 20% GVA (from rain-fed productivity), (iii) return to man-made capital, 5% GVA; and finally (iv) the pair ‘management + family-labour’ gets 13% of total irrigation GVA. The paper illustrates the use of this method for the whole basin and it shows that it may offer promise for supporting sustainable water management at the basin (or the local) scale. It may be used for the implementation of the Water Framework Directive.

The aim of this paper is to contribute to the still scarce literature on Cost-Effectiveness Analysis (CEA) in the context of the EU Water Framework Directive (WFD) in water scarce areas illustrated through a case study in Southern Spain. CEA is the preferred method to select policy measures to achieve the good ecological status of water bodies as prescribed by the WFD. It generates a ranking of the measures, according to the ratio between the equivalent annual cost and the reduction of impacts, to select the measures to be included in the Program of Measures (PoM). Here, the water-saving measures discussed in the public participation process for the elaboration of the PoM for the Guadalquivir River Basin are analysed using CEA. A methodological approach, including uncertainty for cost and efficiency of measures is proposed. A comparison between pressure and impact analysis of the effectiveness of measures shows that, in the context of the WFD, CEA should be based on the impact of the measures rather than on the pressure reduction, as the latter can lead to a misleading ranking of the water-saving measures.