Creating a model to test water policies in Malta

Research carried out by a Maltese academic has provided a solidfirst step in trying to identify costeffective solutions to water problems in Malta.

Dr Liz Curmi recently completed a Ph.D in environmental economics at the University of York, focusing on finding optimal solutions to the scarcity and quality of water in Malta through the use of economic instruments.

She developed a hydrological and economic model for aquifers in Malta together with a farm business model to test the effectiveness of different water and nitrate reduction policies such asquotas, pricing mechanisms, taxes or subsidies.

She also assessed the impacts that such policies could have on the agricultural sector and whether they could be effective in improving the sustainability of water resources in Malta.

Problems with water in Malta include low availability of renewable resources, over-abstraction of groundwater, its unregulated use, and the reliance on expensive oil-fuelled desalination for provision of potable water.

It also predicted that climate change could have a negative impact on water resources in Malta, forcing a decrease in fresh water production.

According to the Food and Agriculture Organisation, water demand in Malta is high, with agriculture and domestic users being the main consumers.

The two main sources of water supply in Malta are groundwater, and desalinated sea water. The FAO states that agriculture is the most demanding sector on groundwater resources with usage estimated at 18 hm3 per annum in 2007.

Water demand for agricultural irrigation is self-served through the abstraction of groundwater (around 80 per cent), with minor contributions from rain harvesting and treated sewage effluent.

Her research probes whether different economic instruments such as taxes, subsidies, pricing mechanisms and quotas could be effective to reduce water usage and nitrate inputs and therefore improving groundwater quantity and quality in Malta.

However, developing an effective and efficient policy instrument requires a number of different economic studies to be undertaken to ensure that the policy in question actually achieves its objectives.

To achieve this, she developed a hydrological and economic model for the aquifers in Malta and combined it with a farm business model to analyse the financial impacts that potential water and nitrate reduction policies could have on the agricultural sector and to determine whether these policies could actually make a difference to the volume and quality of water in the aquifers.

The hydrological-economic model provides optimum extractions, volumes and shadow prices that maximise the total net benefit of supplying potable water over a 100-year timeframe.

The two farm business models, one for arable produce and one for livestock systems in Malta, estimate the amount of pollution that would enter the environment and the amount of water used as a consequence of profit-maximising farmer behaviour. These two models are then used to determine how various economic instruments such as water pricing and water and N quotas could affect the farmers’ income and their choice of crop andanimal mix.

The revised outputs of nitrate and water consumption requirements of the agricultural sector that the farm models predict with these policy measures in place are then fed into the integrated hydrological–economic model to assess the effectiveness of the potential policies.

The results demonstrate that policy instruments could be effective in reducing the amount of water used and produced by the agricultural sector in Malta. The different policy instruments have different impacts on the agricultural sector and the aquifers themselves.

These results have important implications for policy and research, not only in Malta but also in other countries that have similar problems of water pollution and water scarcity.

Many hydrologic and economic models have been produced to date, but they usually stop short of testing the effectiveness and efficiency of policies that could help sustain water resources for years to come.

Dr Curmi is currently working as a researcher at the University of Cambridge on the ‘Foreseer project’, which aims to provide an online tool for visualising the influence of future demand scenarios on global, regional and local requirements of water, energy and land resources.

The basis of the tool will be a set of linked physical models for water, energy and land.