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21 April 2015

Groundwater: economic valuation of deterioration

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Ground water degradation constitutes an issue of major importance in Greece and internationally. The crucial points of the problem can be summarized as follows:
i. Ground water is an important resource for humans. Especially in areas with geo-morphological peculiarities such as Greece and other Balkan countries, it is the main source of water supply for human use (as potable water, irrigation water and industry water).
ii. Ground water is a fundamental resource for the supply of fresh water ecosystems, whether river ecosystems (especially in basins with limited surface runoff), wetland ecosystems, or deltaic ecosystems.
iii. The role of ground water, but also its underground position (which makes it “invisible” to humans) lead to significant environmental pressures on it, usually associated with: disposal of waste water directly into aquifers; pollution of soil through disposal of solid waste and waste water; application of fertilizers and agrochemicals; interaction with contaminated surface water; and saltwater intrusion owing to over-exploitation in coastal areas.

These pressures cause effects which directly and indirectly affect the welfare of individuals, whether users of degraded ground water or not. These effects have social and economic impacts, which need to be investigated.

The social dimension of the impacts imposed by the deterioration of groundwater concerns:
- Lifestyle changes experienced by various groups of the affected population, and associated with increased risk to public health.
- Social exclusion, experienced by vulnerable population groups, which lack access to clean water.
- Stratification of society, which is separated into various social groups depending on their capabilities to adapt and combat the impacts.
- Diminishing of living standards, inter-linked to the broader environmental degradation, which occurs either as an indirect impact of the degradation of ground water , or as an induced impact of a more widely destructive behavior that devalues other environmental goods as well.
- Highlighting the wider social issue of ownership, utilisation and jurisdiction to protect ground water as an environmental good, as well as the social acceptability of the problems created by poor management, under the protection of the law or in violation of the law.

In parallel, the economic dimensions of groundwater degradation impacts are multifaceted and they involve the following:
i. At the individual level: the increase in the cost of satisfying basic daily needs related to the provision of drinking water and water of sufficient quantity and appropriate quality; and to the rising costs of health and living standards;
ii. At the social group level: the increase in the cost of entrepreneurship, through the increase in production costs for economic activities (e.g. industrial and farming activities);
iii. At the local community level: the increase in the cost of providing basic water services, but also reduction of income, owing to direct or indirect effects (increase of purchasing costs and loss of market confidence in local products, respectively);
iv. At the regional and national level: the creation of externalities owing to loss of ground water as an environmental asset of regional significance, the designation of rehabilitation issues and of distribution of the related economic costs, in comparison to the expected social and environmental benefit;
v. At the scientific level: the need to investigate the economic limits, beyond which the restoration of environmental damage is socially unacceptable or questionable, and the quest for ways of “painless coexistence” with the damage.

Consequently, the strong socioeconomic dimensions of the problem of ground water degradation, places society before issues relating to the welfare of individuals and groups directly, through lifestyle changes, and also indirectly, through degradation of the ecosystem, which is the living environment of humans.

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