Water economy

The fundamental objective of this subject is to familiarize the students with the basic concepts related to water economic management. To this end, the study of the proposed theoretical models will be combined with practical cases.

Block 1: Conceptualization
1. Conceptualization: water as a renewable but scarce resource
a. the water cycle
b. water uses
c. absolute and relative scarcity

2. Conceptualization: water rights and incomplete markets
a. Use rights
b. The tragedy of the commons
c. New management formulas: water markets.

3. Conceptualization: value, price and cost of water.
a. The economic value of water
b. Basic approximation methodologies: market price, alternative cost, avoided damages ...
c. The price of water: Tariff systems in the Water Law and Types of tariffs according to use.
d. The cost of water i. Fixed, variable, and marginal cost
e. Second costs of the resources used: surface resources, groundwater, desalination, recycling...

Block 2: Practical applications
1. Phases of economic evaluation of a project
a. Discount rate
b. Cost-benefit analysis: NPV, IRR, and B/C ratio.
c. Multi-criteria analysis and other indicators

Griffin, R. Water Resource Economics: The Analysis of Scarcity, Policies, and Projects. MIT Press. 2016 Selection of articles to be handed out at the beginning of the course.

Reading list given at the beginning of the course.

The competences of the degree to which the subject contributes are the following: a) to know how to communicate information, ideas and problems of solution to questions of economics both to a specialized and non-specialized public, making use of both verbal language and writing and the means and techniques of representation of relationships and presentation of data used in economics; b) obtain the general economic knowledge and learning skills necessary to continue studying and to undertake specialized studies in water economics and other related areas, with some degree of autonomy; c) capacity for analysis and synthesis; d) knowledge of information technology related to the field of study; e) capacity for critical reasoning; f) autonomy in learning; g) sensitivity to social and environmental problems; and h) intellectual stimulation. Students will develop subject-specific competencies in four basic areas: a) differentiation between economic growth and sustainable economic development; as well as key concepts such as intergenerational equity, intragenerational equity and social dimensions of sustainability; b) contribute to good management of resource allocation, especially in the public sphere; c) identify and anticipate relevant economic problems in relation to resource allocation, especially in the public sphere; d) bring rationality to analysis and description of economic development and its consequences.

CON1 Describe the principles, concepts and dimensions that comprise integrated water resources management, and its role as a key tool to achieve water security and advance in the achievement of the associated SDGs. Identify issues related to water development, use and access. Identify and compare water legislation at the European, state, regional and local levels, as well as interpret the conceptual frameworks on sustainable development and their application to the field of water, with a specific focus on the SDGs. To provide the tools to explain the economics of water. List the aspects of public taxation that may be relevant in water management.

HAB1 Use and compare water legislation and conceptual frameworks for sustainable development. Operate with tools that allow estimating the economic variables (macro and micro) linked to water, and use the tools to apply an appropriate taxation and cost policy to water.

COM1 Validate, judge and adapt water legislation to a specific situation. Synthesize the economic variables involved in a water management problem. Adapt conceptual frameworks, in particular the SDGs, to a specific problem.

The teaching methodology combines theoretical concepts with empirical applications. Students´ involvement and active participation is a “must” for this course. Mandatory readings will be assigned at the beginning of the course.

Evaluation
The evaluation system of the subject will be based on two different types of requirements: a) The final test, consisting of a written exam in which answers must be given to four questions related to the knowledge included in the program, which will be held on the date officially established by the center;
b) The completion of the activities that will be proposed gradually throughout the theoretical and practical sessions of the subject, including the reading of certain selected texts. The final grade will take into account these two aforementioned requirements, with a weight of 50% of the continuous evaluation, and the remaining 50% of the total grade will be given by the final exam. These criteria will also be applied in the extraordinary exams. Students who do not take the final exam -requirement (la)- will receive the qualification of "Not presented". The evaluation grade will be retained for the September exam, but not for subsequent academic years. Recommendations for study Class attendance is recommended. Basic knowledge of statistical tools and English language are necessary for the good use of the course.

This course has 3 credits, corresponding with a total of 25 hours. The hours will be divided in the following way: 1 hour for students’ office hours; 6 hours of formal lectures, and 17 for interactive teaching (exercises, and commentary of texts).
The workload for the student is estimated in 51 additional hours.

Recomendacións para o estudo

Recoméndase a asistencia á clase. O coñecemento básico de ferramentas estatísticas e lingua inglesa son necesarios para o bo aproveitamento do curso.