Author(s)

A. G. Banderas, R. González-Villela

Abstract

This paper returns to the controversy about the Intrinsic Value of Water (IVW) which should be included in the price paid by the consumer. The IVW is calculated based on the solar energy involved in the water cycle, which annually generates a considerable volume of water of the highest quality without human intervention. In 2014, Mexico invested a budget of 3,700 million USD in water management. This came mainly from government subsidies, with a quarter coming from water rates. The volume of water available is 459 km³, approximately 16.5% of which comes under the field of federal administration, including the volume of dams and the concession of rivers and groundwater. The federal budget divided by the volume of managed water is the water cost (0.043 USD m⁻³). The federal agency delivers the water in bulk to the states and the municipalities through the Watershed Councils, who determine the price of water to users based on their availability nationwide. The energy required to evaporate the water of the annual precipitation in Mexico is 1.01×10¹² kW h year⁻¹. This energy is divided by the precipitate volume and then multiplied by the lower price of kW h to calculate the intrinsic value of water: 0.036 to 0.13 USD m⁻³. The federal, municipal and intrinsic costs are added to calculate the final value. The IVW is a kind of natural goodwill that each country should pay according to their hydrological balance.

Keywords

hydrological balance, water and electricity cost, added value