Transcript Country Case: Brazil Outline

Water Charge Instruments for Environmental Management
in Latin America: from Theoretical to Practical Issues
Brazil Country Case
Ronaldo SEROA DA MOTTA and Jose Gustavo FERES
[email protected]
January 2003
INTER-AMERICAN DEVELOPMENT BANK REGIONAL
POLICY DIALOGUE
Legal Framework
• 1934 – Water Code
 Priority to quantitative aspects of water management
 Energy-oriented structure
 Centralized institutional arrangement, with predominance of
National Department of Water and Eletric Energy (DNAEE)
 Distinction between federal and state waters
 Water permits
• National Environmental Council (CONAMA) Resolution
no.20/1986
– Water bodies classification
The Old Paradigm
• Absence of connection between the quantitative and qualitative aspects
of water management.
• No integration between surface and groundwater.
• Sector-oriented policy, with priority given to the energy sector.
• Centralized and non-participative: decision-making process controlled
by federal and state agencies, excluding municipal governments,
private users and civil society from the debate.
• Inefficient CAC policy instruments.
– Mechanisms were rarely implemented
– Insuficcient financial resources preventing adequate monitoring and control
activities
– Resulting in insufficient incentives for efficient use
The New Water Policy
• 1997 Water Law
– Principles
•
•
•
•
River basin as the basic management unit
Decentralized and participative approach
Recognition of the economic value of water resources
Rational use to attend multiple ends
– Institutional arrangements
• National Water Resources Council (CNRH): responsible for
planning and regulation of the National Water Resources
Management System
• Water Resources Secretariat (SRH): in charge of elaborating
the National Water Policy
• National Water Agency(ANA): executive body in
charge of implement and enforce the Water
Resources Management System
• State Water Resources Councils and Secretariats
• River Basin institutions
– River Basin Committees: political entity with decisionmaking and regulatory powers; non-compulsory creation
– River Basin Agencies: executive branches
– Instruments
•
•
•
•
River Basin Management Plans
Issuance of water use permits
Classification of water bodies
Water charges
Water Charges
– Although some states have approved new water
laws, the definition of the pricing criteria has
been an obstacle to their implementation
– Objectives
• Revenue generation to finance basin investments
• Improve envrionmental quality
Revenue-generation
to finance basin’s
investments
Improve
environmenta
l quality
Type of
use
Socioeconomic
conditions of the
user
Regional
economic
objectives
Alagoas (1997)
X
X
X
X
X
Bahia (1995)
X
X
X
X
X
Ceará (1992)
X
X
X
X
X
X
Espírito Santo (1998)
X
X
X
Goiás (1997)
X
X
X
Maranhão (1997)
X
X
X
X
X
Mato Grosso (1997)
X
X
X
X
X
Minas Gerais (1999)
X
X
X
Pará (2001)
X
X
X
Paraíba (1996)
X
X
X
Paraná (1999)
X
X
X
Pernambuco (1997)
X
X
X
Piauí (2000)
X
X
X
Rio de Janeiro (1999)
X
X
X
X
X
X
X
X
X
X
Santa Catarina (1994)
X
X
X
X
São Paulo (2000)
X
X
X
Sergipe (1998)
X
X
X
X
National (1997)
X
X
X
X
States(issuance year)
Distrito Federal (1993)
Rio Grande do Norte (1996)
Rio Grande do Sul (2000)
Inter-basin
revenue
application
Modify space
occupation
X
X
X
X
X
X
X
X
X
X
X
X
The State of Ceará
• Since early 90’s
• Revenue-raising goals for reservoir and channel
management for water distribution in semi-arid
region
Charge levels (US$/1000 m3 ) in 2001
Industrial = 327; Domestic = 5.53-11.91
Irrigation and aquaculture = 0.43-2.13
• achievements over previous levels: 99% level of
supply assurance for the industrial sector, 95% for
urban consumers and 90% for the agriculture
The State of São Paulo
• 1992 state water law following the French
system
• Pricing criteria for charges not approved yet
• Charges may vary according to the water
source (superficial or underground); type,
location and effective volume of use;
conditions of water quality, availability and
regularization in the basin; seasonal effects;
and conservation measures.
Federal River Basin of Paraíba do Sul
• First federal experience to efffectivelly start in March 2003
• Creation of a river basin committee - CEIVAP - with
assistance of the National Water Agency
• Basin area across the states of Minas Gerais, Rio de
Janeiro and São Paulo with about 5.6 million people living
in the basin
• Main sources of pollution is domestic with BOD discharge
of 240 t/day
• 69% connected to urban sewage network but only 12.3%
treated
• Industrial BOD 40 t/day with quite high level of noncompliance to standards
• Main water supply of the City of Rio de Janeiro and
existence of small hydropower plants
Adopted Principles
• Simplicity: based on directly measurable
parameters in order to allow easy monitoring
and clear understanding by the users;
• Acceptability: participatory approach in the
CEIVAP
• Signaling: signals about the economic value and
sustainable uses of water
• Minimization of economic impacts: signals,
however, must not be so strong as to jeopardize
acceptability
• Contradictory nature of principles: acceptability and
minimization of economic impacts are at odds with the
signaling role of water charges
• Result: too much emphasis on revenue-raising and cost
sharing mechanisms
• Annual revenue target of US$ 5.45 million to leverage
national funds
Criteria
• Charges applied to withdrawal volume and
volume needed to dilute pollution of each
user level according to environmental
standards
• Hydroelectric plants pay an additional
percentage of their water royalties in place
since the early 90’s
Formulae
Total monthly water charge is then given by:
TWC = QW x [ K0 + K1 + (1-K1) x (1-K2K3)] x PUP
where
QW =monthly withdrawal (m3/month);
K0 = withdrawal use unit price multiplier defined by CEIVAP (less
than 1.0);
K1 = consumptive use coefficient (i.e., proportion of withdrawn water
that is not returned to water bodies), which varies according to the
user’s sector of activity.
K2 = percentage coverage of effluent treatment by the user
K3 = efficiency level in terms of BOD reduction, which varies according
to the pollution abatement process adopted by the user
PUP = public unit price (R$/m3) corresponding to charges related to
withdrawal, consumption and effluent dilution, defined by CEIVAP.
Application
Simplicity
• Only BOD will be charged at the initial phase
Acceptability
• CEIVAP defining the values for the public unit price PUP
and the withdrawal unit price multiplier K0.
• All other coefficients (K1, K2 and K3) are given by
technically defined relations and user-reported
information.
Signaling
• All users must pay: whatever the value of the charge
Minimization of impacts
• Charge levels defined according to simulation studies of
charge cost on sectoral production costs
• Domestic and industrial users:PUP = US$ 7.78 /103m3 and
K0 = 0.4 to all permit-holders with generous reduction
incentives for those paying in time in the first month
• Farmers paying only 98% of the domestic and industrial
PUP and exempt of paying pollution at the initial phase.
Revenue allocation
• Revenue is fully returned to the basin
• Expenditures are initially concentrated in monitoring and
investments in sanitation works
Conclusions
• Brazil has followed a gradual approach to
fit into existing monitoring capacity to
evolve with the system performance
• Participatory approach has been crucial and
significant to assure political support
• Although all pay, price incentives are
minimal with differentiated sectoral
treatment
• Crucial questions remains: how to increase
the relevance of signaling principle in later
phases?