Экономические науки / 13. Региональная экономика

Doctor of economics Sunduk A.N., Cherednichenko I.G.

Public institution “Institute of environmental economics and sustainable development of national academy of sciences of Ukraine”, Ukraine

Economic evaluation

of the water resources of Ukraine and its regions

The economic evaluation of the water resources is aimed to define their utilization capacity for the optimal allocation of water and water consumption sources among the participants of the water industry. Ukraine is one of least provided with water resources European countries, and their distribution on the territory is highly uneven, therefore the scientific methods for the water resources evaluation need to be studied for the effective functioning of the public economy.

The economic evaluation of the Ukrainian water resources and its regions may be performed only basing on efficient methods which would allow to take into consideration all of the present and potential appraisive characteristics of the water resources. In order to carry out scientific studies it is important to have methodological approaches to the evaluation of specific event or process, whose effectiveness, efficiency and performance define both the peculiarities of the study and the approbation of the results. Considering this, the methodic guidelines, which, on the base of the described methodological principles, form and define the ways of the evaluation of the studied approach, are a necessary element of the scientific study, as they allow to implement the applicative dimension of the development.

In the context of performing the evaluation of aggregated cost estimate of the water resources it should be noted that the forming of events and processes functioning study bases, which are concentrated in different time dimensions and administrative territorial subordination, is a complex procedure which uses a large quantity of parameters that take into consideration their ambiguity and diversity of meanings. But the formalization of these events study process is necessary, as it guarantees analytical approach and to some extent decrease the subjectiveness in making decisions in this and other fields, as well as exclude the mistakes which could influence life and activity of people in huge territories.

A lot of works by domestic and foreign scientists are dedicated to the economic evaluation of Ukrainian resources, but most of them deal with land resources. The methods of water cost evaluation were developed mainly as isolated economic projects or strategies. The latter are most commonly implemented in the limits of a certain district of water resources management, like river basin. Only limited experience has been accumulated concerning aggregating these local values of quality on the national level [1].

In the context of performing the evaluation of aggregated cost estimate of the water resources it should be noted that the forming of events and processes functioning study bases, which are concentrated in different time dimensions and administrative territorial subordination, is a complex procedure which uses a large quantity of parameters that take into consideration their ambiguity and diversity of meanings. But the formalization of these events study process is necessary, as it guarantees analytical approach and to some extent decrease the subjectiveness in making decisions in this and other fields, as well as exclude the mistakes which could influence life and activity of people in huge territories. Therefore, we aim at defining the levels which need to be considered when performing the evaluation of the water resources, and basing on these positions, to create methods which can adequately evaluate the cost characteristics.

The relevant way of performing the evaluation of water resources as a part of national wealth is considering the following levels: level “I” – the evaluation of “physically available” water resources is performed in the limits of certain territory: level “II” – the evaluation of water resources market characteristics is formed; level “III” – additional characteristics are considered, which are or may be activated in the future.

On the base of the defined positions the methods may be formed which would allow to evaluate the water cost characteristics, which is a rather complicated task. Let us divide the methods of evaluation according to the offered levels (physical, market, additional).

Physical characteristics evaluation methods. We believe the following elements should be taken into consideration: the volume of the resource taken for the evaluation; its price; correcting value (which in this case may be specified as a territorial coefficient). Due to the above said, the formula for calculations on this level may be as follows: PCCV (physical characteristics cost value) – (Vpr ●Pr)●Cc, where Vpr – volume of the physical resource, Pr – the resource price; Cc = correcting coefficient.

One of the top priority points for using of this formula is defining the price of the resource separately for the constituents such as surface water, groundwater and springs, as well as inland sea and territorial sea.

Methods of market characteristics estimations. The estimation of market values in the area of water resources use is quite complicated. In our opinion, the market characteristics may be divided into two groups – those concentrated in the area of water usage and the group of those inclined to financial relations (rent and ecoservices). The first group is more simple for evaluation and may be limited to the calculation of the cost of the water being used, in the field dimension, as well as to the general value of water losses. The main elements that need to be taken in consideration when counting the water usage, are: the volume of the economic resource; the branch price of the resource; correcting value: ECCV (economic characteristics cost value) = (Ver ●Pbr)●Cc, where Ver – volume of the economic resource, Pbr – the resource branch price; Cc = correcting coefficient (which may include territorial features).

The general value of water losses is calculated as the difference between the volumes of water drawing and its usage.

The platitude of financial relations is specified by the calculation of rent and ecoservices size. The objective base of water rent is the differential cost – the difference between public (market price) and individual (production expenses plus certain additional income necessary for continuing the production) cost of commodities and services which have the commodity form on the market.

Rent estimates take into account the limitation of the natural resource, while the expenses on its reclamation are average, therefore the economic estimate is more objective. The rent approach regards as an economic estimation the maximum possible economic effect from the source exploitation with the given level of expenses and existing limitations determined by the level of technology development etc., i.e. the differential rent. In this case the price of water resources will include not only the rent due to the quality and location, but also the one that reflects the effectiveness of additional operational vested capital.

Under the rent approach one of three estimation methods for the water bodies right of use: direct capitalization of the rent income (water rent) and the discounting of the rent income (water rent) brought by the usage of water body natural resource and the “technics” of rent income (water rent) surplus [2, p. 142-184].

It should be noted that in the scientific literature the most wide-spread are two methods of the rent determination, which may be shortly recorded as the following formula: where – estimate of the natural resources use object; – marginal costs; – individual expenses.

The second formula is as follows: where р – consumer estimate of a unit of production – effect in the marginal sphere of consuming (price) (ціна); – return of the natural resources usage object unit.

The estimation of the ecoservices cost. Ecoservices are advantages received by the mankind from the natural water environment. In a general sense, if the ecosystems are seen as a kind of the natural capital, the ecosystem services comprise the whole range of commodities and services rendered by nature, i.e. all four functions of the natural capital (resource, regulative, esthetic, support of human health). According to the existing classification, the services rendered by ecosystems may belong to one of four wide categories, which are essentially congruent with the functions of the natural capital.

The estimation of the ecosystem advantages and the services rendered by the water resources foresees a complex of actions aimed at forming the money terms of their usefulness for the state (which is determined by the influence of factors of different genesis) for the certain time period; it is a reflection of useful consumer features of the water resources in terms of money. It is important that the estimation reflects the maximum effect from its use.

Concerning the water resources, their functional peculiarities are mainly associated with those possible useful actions, advantages they are able to give to the environment (ecological functions) and the society (social functions). But please note that such division is rather conventional, as these functions are closely related to each other and determine one another.

One of the central points is ecologic functions which may be regarded concerning the following aspects: as an integral element of the natural ecosystem (a part of biotope), the climate regulator within the limits of some territory, the habitat of some life forms, the natural arterial road for the migration of life forms etc. At a first glance, the described provisions are common, objective and do not provoke any objections. But, considering such triviality of the described functions, the approaches to their economic evaluation are still being discussed and are not developed enough. Actually, the whole cost of the water resources ecologic functions should be take into account and calculated.

The social functions of the water resources are derived from treating them as a source of water supply, influence on public health, as a recreation, therapeutic, esthetic medium.

In our opinion, in order to calculate the ecoservices the following should be taken into account quantitative and qualitative characteristics of water resources for a certain territory; their meaning for water users; price values.

The economic evaluation of the ecosystem services must be defined by the ability of accounting these peculiarities of the water resources. In general, for the economic evaluation of the ecosystem services rendered by the water resources and its use in real economy at least four stages may be pointed out:

Identification of an ecosystem service;

Defining its economic value;

Defining the receiver of the benefits from the service;

Forming the mechanism of payments (compensation) for the ecoservices.

Taking these stages into account, the main economic approaches to the evaluation of the water ecosystem services may be presented according to the following scheme: economic approach – objectives of use – peculiarities of evaluation performing (tab.).

Additional characteristics evaluation methods. These characteristics may be defined, first of all, as virtual water which is included in products during the manufacturing process and then transported outside the country.

Table

Economic approaches to the evaluation of the water ecosystem

and services generated by them

Economic approaches	Objectives of use	Peculiarities of evaluation performing
Defining the general value of the current benefit stream from the ecosystem	Understanding the magnitude of the ecosystem contribution for the population	Define all the compatible services rendered by the ecosystem; give the quantification to each service.
Defining the pure benefits from the action / intervention which leads to the change of the ecosystem condition.	Determine the economic relevance of the specific action / intervention.	Measure how will the quantity of every service change as a result of action / intervention compared to its quantity before the intervention.
Analysis of the distribution of expenses and benefits related to the ecosystem (or action / intervention).	Determine those who won or lost in order to be fair in practical matters.	Discover the corresponding concerned groups; determine which services they use, as well as the value of these services for specific groups.
Defining the potential sources of funding for the protection of the ecosystems.	Make the process of the environmental protection more financially stable.	Determine the groups receiving significant benefit streams, from which, with the help of different mechanisms, financial resources may be drawn.

The importance of such studies is explained by the fact that any commodity or service include some water resources spent on their production. When the products are moved for the reasons of the oversea trade, the water resources migrate as well. This, in turn, leads to great international redistribution of the water potential. The examination of these matters allows to determine the basic parameters of the given processes and form the key approaches to improving the water potential basing on the use of oversea trade instruments by the wet production.

The following elements should be taken into account for the calculation of the virtual water characteristics within the limits both of the country and its regions: the volume of production manufactured by the specific branch of economy; virtual water input for a production unit; resource price for the branch.

Calculation formula: Wvirt.= (Vp ● Iw) ● Pbr, where Vp – volume of production of a branch; Iw – virtual water input for a production unit; Pbr – branch resource price.

Therefore, we defined the methodological base of performing of the country water resources economic evaluation and the main provisions and options of use of the methodological means for the water resources evaluation, where it will be functioning correspondently and yield actual results. The system of methods for the evaluation of the water resources cost characteristics, regarded within the limits of physical, market and additional coordinates, is presented. It will be appropriate in future to perform calculations by the given formulas in real time and on the specific object using the above mentioned methods, and basing on the received data define the financial value of water resources.

References

1. Система эколого-экономического учета водных ресурсов. ООН. – Нью-Йорк, 2012 г. – 220 с.

2. Ушаков Е.П. Рентные отношения водопользования в России / Е.П. Ушаков. – М.: Наука, 2008. – 303 с.

3. Хвесик М.А. Економічна оцінка природних ресурсів : основні методологічні підходи / Хвесик М.А., Збагерська Н.В. – Рiвне: РДТУ, 2000. – 194 c .