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June 28, 2005
Economic Development - Med Basin and Bindings Constraints, or rather The Binding Constraint
While this article is not about "my" region per se, it is evocative for everything noted here is equally true of the entire southern Med basin. Something that wet climate people do not properly appreciate and I suspect a nasty item that may not be easily surmountable or perhaps not surmountable at all.
Let me run through quickly.
Spain's worst drought just the start as deserts spread
The Financial Times
By Leslie Crawford
Published: June 27 2005 19:41 | Last updated: June 27 2005 19:41
A severe drought in Spain, the worst since records began in 1947, is playing havoc with livelihoods, sparking forest fires and threatening millions of tourists with water rationing as they head for the beaches this summer.
Worse yet, 2005 is unlikely to be a freak year. Spain is getting hotter and drier, with average temperatures rising by 1�C since 1960. The European Environment Agency estimates that average temperatures will rise by a further 4�C over the next century.
Winters are now so mild that storks have stopped their annual migration to north Africa. Scientists are witnessing desertification many estimate that up to one third of the country may be a desert within 50 years.
This is Spain recall. Now think of the pressures on the southern side of the Mediterranean, from Morocco all the way around to Jordan, Syria and Lebanon.
Official figures show that two thirds of the country is now affected by severe drought, with areas around Valencia, Andalusia and Catalonia, where populations more than double during the summer months, among the worst hit. Farmers and town councils in these areas are already fighting over the allocation of scarce water.
Tourism, the holy grail of interim development. A good economic boost. Long term costing however is not being done. Possible to do? Hard to say.
Agricultural losses are estimated at 1.6bn ($1.9bn), with much of the olive crop in Jaen, Andalusia, the principal olive-growing area, given up for lost. Catalonia has slapped restrictions on water for irrigation and industrial use in the hope of forestalling broader rationing during the dry summer months.
�We desperately need rain before October,� says Jaume Sol�, Catalonia's regional environment minister.
Season starts in October, roughly.
The drought has been exacerbated by Spain's construction boom, which saw a record 700,000 new homes built last year about half of them on the coast.
But the frenzy of building in one of the driest regions of Europe has severely challenged the ability of town planners to provide basic services such as running water.
In the provinces of Alicante and Murcia, on the Mediterranean coast, the regional water authority has asked councils to delay water connections to new tourist developments until after the summer.
The World Wildlife Fund estimates there are 10,000 illegal wells in the Costa del Sol, many of which supply tourist developments and are accelerating the depletion of water resources.
�Spain is abusing the sustainable limits of tourism development,� says Chuck Svoboda, a former Canadian diplomat who leads Abusos Urban�sticos No, a campaign group that is fighting corruption in real estate development on the coast. But the building boom shows no sign of slowing despite the lack of water. The J�car water authority, which supplies Valencia's 4.5m residents, estimates 1m new homes will be built in Valencia over the next decade. In addition, it says town councils have approved the construction of 67 new, water-needy golf courses in the region, bringing the total to 69.
Rafael Blasco, Valencia's regional housing minister, describes golf resorts as a �new kind of agriculture�. He wants the European Union to allocate farming aid to them and dismisses talk about development being overdone.
Emphasis added.
Well, among the items here (besides corruption) that attracted by attention was the amusing assertion of golf resorts as a "new kind of agriculture" and the idea of EU farming aid monies going to such.
I find that a delightfully stupid idea, delicious really. Delicious in its scope for corruption.
Cristina Narbona, Spain's environment minister, says the drought has put the spotlight on the country's farmers, who account for four-fifths of water consumption in Spain. Ms Narbona says fewer than 10 per cent of farmers use efficient irrigation methods. �The remaining 90 per cent still resort to flooding their fields, an incredibly wasteful practice that needs to be eradicated,� Ms Narbona says.
Ms Narbona has secured a 370m budget to fight the drought with desalination plants, more water recycling and the drilling of new wells in the worst hit regions. The risible price Spaniards pay for their water 30 times lower than the European average remains a taboo subject.
Earlier this year, Spain's agriculture ministry shot down a plan drafted by Ms Narbona's department that would have imposed punitive water rates on farmers who waste water.
Tourist resorts and golf courses, with their heavy water consumption, would also have had to pay 15 times more for their water than the average Spanish household.
Without cost incentives to reduce consumption, Ms Narbona can do little more than issue new appeals to save water.
Ah the taboo topic of water pricing. One that gets the Left all in a lather when it is in the context of emerging markets/developing world. The whole "water is a human right" blather. Senseless, mindless oppositionalism (why I have contempt in general for "progressive activism"), when the reality is that personal usage water is fairly trivial as compared to "productive."
Easy, price water. Nope. Not so easy. Emotive, a bit harder to pull off than the academic solution might suggest (proper pricing requiring infrastructural improvements that may be quite vast and expensive). However, absolutely necessary.
Even then, with declining input rates - i.e. less rain - and increasing reliance on non-renewable water resources (fossil ground waters), there is a real recipe for disaster. Now, Spain will have the resources (in theory) to address. Will the Southern Med basin be able to, and in the required time frames.
An idea I have been kicking around, by the way, is in regards to reforestation (a useful form of water retention as well as interesting for carbon sequestration) as a long term investment. Massive reforestation as say a 50 year time horizon placement. Problems, many problems, but as a private placement of capital, could be very interesting, and addresses the chronic problem of little namby pamby development projects - that is they're too fucking small and weak to make a difference.
Private capital mobilsation, with some helpful upfront development capital kickers to incent the initial projects.
Posted by The Lounsbury at June 28, 2005 05:23 PM
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Jan-July 2005
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