THE COST OF FRESHWATER CHARGING IN BRAZIL: SUPPLIERS’ MAIN ALTERNATIVES

Artigo publicado na revista Sustainable Water Resources Management (SWAM). Teixeira, T., Veiga, K., Julien, D. et al. The cost of freshwater charging in Brazil: suppliers’ main alternatives. Sustain. Water Resour. Manag. 9, 124 (2023). https://doi.org/10.1007/s40899-023-00908-0

ABSTRACT
Charging for the use of freshwater raises the debate about the financial sustainability of water suppliers and the problems of social and operational efficiency in the sector. The price of raw water, which aims to avoid wasteful uses and give an idea of the value of water, introduces a new cost element to be managed by users. Given the increased operating costs arising from the implementation of raw water charging, this paper analyzes alternatives for water suppliers. We compare a #1 cost absorption scenario with the possibility of passing on to final consumers in the first block tariff, defined by volume (#2a), and the second block tariff charged by additional m3 consumed (#2b). The results show that scenario #1 reduces the availability of resources for investments, compromising the maintenance of the infrastructure and the expansion of services. Alternatively, as a natural monopoly industry, consumer pass-through is more likely. Both scenarios #2a and #2b nullify the incentive for rational use and operational efficiency, add risks to environmental sustainability and compromise the plans of the basin committee. However, in scenario #2b, the possibility of lower water consumption by households, changing to the tariff of the first block, brings back the possibilities of scenario #1. Scenario #2a, as a plausible choice, requires an accurate discussion of the social, institutional, and environmental aspects of water governance without losing attention to local particularities. To exemplify the discussion, we tested these scenarios in a Brazilian semi-arid watershed where the freshwater charging is not yet in force.

Dra. Telma C. S. Teixeira - Líder do grupo RHIOS
Bl. Karine dos S. Veiga - RHIOS,
Msc. Denis L.L Julien - RHIOS,
Dr. Frank Pavan de Souza - RHIOS, ISECENSA

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Karine Veiga,
Denis Julien,
Frank Pavan de Souza,
Telma Teixeira