Experimental valuation of Dutch water resources according to SNA and SEEA

The valuation of water resources is an important element for sustainable water resource management. Valuation exercises depend on their purpose and context of use. The objective of this paper is to investigate methods to value water resources that are consistent with national accounts principles. This implies that we look for exchange values that exclude consumer surplus. While water resources provide a range of benefits, in this paper we follow the measurement boundary of the System of Environmental Economic Accounting (SEEA) Central Framework and restrict ourselves to the extractive use or provisioning service of various types of water resources, surface- ground-, and soil water as recorded in the physical supply and use tables. The main users/uses that we value are agriculture (predominantly soil water), the water supply sector (mainly surface and groundwater) and industries (surface and sea water primarily for cooling). We obtain a value of water resources for the Netherlands in 2010 of approximately 26 billion euros, which is about 10 percent of the value of natural capital currently included in the Dutch balance sheet. We find that the resource rent method has limited feasibility due the occurrence of negative rents or difficulties to identify the return to water in the rent. The replacement cost method has better potential but more research is clearly needed to improve estimates.