Cost of charging for water use in the Brazilian Cerrado hydrographic basin

Abstract

This study analyzed the relative cost of charging for water use with respect to water users' production costs in the Grande River Basin, located in the Brazilian Cerrado, considering the principal charging methods existing in Brazil. The study was developed based on: the rights of use grant data surveys pertaining to water resources and the classification of bodies of water into usage classes; a simulation of charging for water use through various methods; and an analysis of the relative cost of charges on the production cost of the water users. The charging methods used by the following were studied: the Committee of the Basin of River Paraíba do Sul (CEIVAP), the Committee of Basins of Piracicaba, Capivari and Jundiaí Rivers (PCJ), the São Francisco River Basin Committee (CBHSF) and the Doce River Basin Committee (CBH-DOCE). The study verified that irrigated agriculture is the sector that uses the most water, representing 46.4% of the outflow granted in the basin. Considering the different charging methods, the collection in the basin of the Grande River potentially allows for investments of US$ 1.2 million (PCJ), US$ 920,000 (CEIVAP), US$ 426,000 (CBH-DOCE), or US$ 297,000 (CBHSF) in this region, leading to average relative costs of 0.68% (irrigation), 0.28% (human) and 0.08% (industry). For this reason, there is the possibility of implanting charges for water use in the Grande River Basin, with either the CEIVAP's or PCJ's method appearing to be the most suitable, given that the parameters of these mechanisms are in line with existing activities in the basin.