Integration of hydrological and economic approaches to water and land management in Mediterranean climates: an initial case study in agriculture

A distinction is commonly drawn in Hydrology between ‘green’ and ‘blue water’ in accounting for total water availability in semi-arid regions. The criterion underlying this classification is important for successful water management, because it reveals how much natural water is and/or could be used by households, industry and, especially, agriculture. The relative share of green and blue water is generally treated as a constant. In recent years, a growing hydro-geological literature has focused on a phenomenon that significantly affects the stability of the green/blue water ratio. This is the increase in land cover density and its impact on runoff in regions with a Mediterranean climate, such as the Ebro Basin in Spain. We seek to carry this knowledge over into the parameters of disciplines concerned with the economic valuation of water and territorial resources, and translate it into the language used by water management professionals in the expectation that this contribution will improve the way we assess and account for real water availability. The heart of the matter is that the increasing density of forest cover produces both positive and negative environmental and economic impacts, presenting new economic and environmental problems that must be examined and assessed in a hydrological-economic context. We will show that these positive and negative effects are sufficiently important to merit attention, whether they are measured in physical or economic terms. Finally, we make an initial proposal for the economic valuation of some of the effects produced by these hydrological changes.