An economic appraisal of the Spanish national hydrological plan 1

Article 43 of the Spanish Water Law (revised text, Legislative Decree 1/2001 of 20 July) lays down the obligation for the planning of national water resources to be approved by law. This mandate was fulfilled on 6 July 2001, with the publication of the law of the National Hydrological Plan (Law 10/2001, 5 July, of the National Hydrological Plan, hereinafter referred to as the NHP). The application of this law has important implications from an economic point of view, given its large budget (at least €4.2 billion, corresponding to the official budgeted amount), and the economic forces it will unleash if it is completed. It will also have serious repercussions for the Ebro basin and the catchment basins that will receive the diverted waters. The NHP, and all the corresponding studies and documentation, offer numerous interesting perspectives for economic analysis, from methodological and conceptual aspects to empirical consider ations. Its analysis from an economic policy viewpoint has fostered numerous contribu tions (all the official documentation on the NHP is available on the website of the Ministerio de Medio Ambiente (www.mma.es)). There may, or may not, be a scarcity of water resources in certain basins, but there are so many sources of documentation, analyses and research studies on the topic that it is literally impossible to revise them in such limited space. A fair summary of this body of literature is that the NHP has been severely judged by most economic analysts. A concise and synthesized sentence would appear to reflect the general agreement that the NHP should not be carried out according to the terms, premises and budgets on which it has been drawn up (the most complete source of information published to date is the volume edited by P. Arrojo in 2001, El Plan Hidrolo´gico Nacional: A Debate (Bilbao, Fundacio´n Nueva Cultura del Agua y Bakeaz), which contains dozens of reports on the NHP). The purpose of this paper is to describe the assumptions used in the economic analysis of the NHP and summarize the extant literature on the subject. It attempts to review the state of the art of the knowledge concerning the 'NHP economy' and finally formulate some reflections on the future of this NHP and other optional plans.