Hilda R. Guerrero García Rojas

Introduction and Lessons Learned

This chapter provides the overall context and setting for the volume. In this chapter the scope of the book is established along with the way each chapter addresses its objectives and reach. It also provides an overview of the chapters underlining the links and continuity among them. A lesson learned section is provided, summarizing the lessons from the different chapters in the book in a way that readers can learn about the concluding notes presented by the authors in each section.

Industrial Water Use in Mexico: Analysis of Efficiencies Using Water Price Elasticity

Efficient use of water in Mexico is determined by a tariff structure, which is defined according to the type of user and a categorized classification of water availability zones which arises from the scarcity principle, assuming that the water policy for an efficient water use in Mexico follows the economic principle of supply and demand. In this chapter an analysis of changes in water demand for the industrial sector is performed by hydrological regions in relation to variations in tariff structure. Analyzed data take into account a 14-year period where irregular changes can be seen both in tariff and in demand for water in hydrological regions. According to the result of the price elasticity of demand, there is no direct relationship between an increase in tariff and water demand. This implies that, if there is an efficient water use policy, at least with analyzed data, both the pricing by availability zones and the tariff structure by type of user do not behave as an adequate economic instrument, given that there is a significant variation between applying an increase to the water tariff and the expected response of its demand.

Water Price Policy and Its Institutional Role as an Economic Instrument for Water Management

An analysis on the reform of the Federal Law of Rights that establishes four availability zones in Mexico for water use, catchment, or exploitation and its role in the tariff policy as an economic instrument for water resource management is presented. Before the reform, until 2013, Mexico was classified in nine availability zones, where Zone 1 presented lesser availability levels of water and hence a higher tariff or price and vice versa in Zone 9, besides the fact that zone classification complies with a municipal geographic division criteria with no distinction between hydrological basins and aquifers. As of 2014, Mexico is classified in four availability zones, but current rates or prices respond to a relative availability criterion for hydrological basins and to an availability index for aquifers, even if located in the same territory, which promotes heterogeneity of rates for the collection of fees. It has been considered that although the new classification of availability zones will yield a higher fee revenue, that does not necessarily mean that water management, in terms of efficiency and sustainability, is the most appropriate, since the new classification of zones may force users to migrate to areas where fees are lower and generate pressure on the water resource.