The Uses and Value of Water in Italy: Evidence from Selected Case Studies in Italy, with a Particular Focus on Irrigation, Industry and Hydropower

Abstract

This chapter analyses the most relevant economic literature on water uses in Italy. In particular, the economic value of water is investigated in four main sectors: urban water services, agriculture, recreational industry and energy. As far as the urban water sector is concerned, most studies analyse the consequences of the introduction of the so-called Legge Galli, a complex reform in water governance started in 1994. The studies on water use in the agricultural sector are divided mainly in two branches: the use values of water (which was found to range from 0.3 to 1.2 €/m3) and the total economic costs and benefits of certain measures, such as for drought management or pollution reduction. For what concerns industry and energy, the economic value of water is rarely evaluated, especially in the former sector, while the majority of studies seem to focus on the environmental impact of production by considering water use and consumption (water footprint). In the chapter, instead, the point of view of the consumer is primarily analysed in relation to the recreational sector, where the willingness to pay for better environmental and recreational services connected to water was estimated between €3 and €1056 per year. Nevertheless, the literature review points out the lack of cross-sectional studies of sectors. This lacuna is probably connected to the limited integration among the actors that manage water resources and a too fragmented governance. Solving these issues will guarantee a better allocation of water resources both among users and over time, thus targeting the challenges of adaptation and resilience in the water-energy-food nexus.