The Economic Role of Water under Scarcity and Sustainability Constraints

A special issue of Water (ISSN 2073-4441). This special issue belongs to the section "Water Resources Management, Policy and Governance".

Deadline for manuscript submissions: closed (31 May 2021) | Viewed by 27605

Special Issue Editor

Department of Water Resources and Environmental Engineering, School of Civil Engineering, National Technical University of Athens, Athens, Greece
Interests: water resources; computational intelligence; sedimentation; stationarity/non-stationarity; uncertainty analysis; energy; macroeconomics
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

There is an abundance of literature examining the role of water in terms of its existence in sufficient quantities so that these will support, in a sustainable way, livelihood, well-being, social and economic development, and in addition prevent water pollution and disasters while preserving ecosystems as per the 2017 UN definition of the Water Security definition.

The aim of this Special Issue is to present articles going a step further, toward the exposition and analysis of the quantitative/qualitative role water plays in an economy under scarcity and sustainability constraints. These constraints may alter the nature of the production function at country/region level by the inclusion of extra variables. A putative hierarchy of needs may alter supply/demand curves and Slutsky/Hicks decompositions according to the development level of the country/region considered. Further, they will extend to the Leontief matrix of economy, acting as an enveloping frame for any model used to describe the resulting economy. Particular weight will be added to optimality conditions regarding various economic variables.

Cost effects and production level/restrictive choices for goods transmitted to the economy are of importance, and consumer choices will be affected using classical or novel methods, e.g., Thaler’s recent theory.

Assoc. Prof. Dr. Dionysia Panagoulia
Guest Editor

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Keywords

  • consumption hierarchy
  • water and sustainable livelihood
  • water and well-being
  • water and economic development
  • water production function under water security constraints
  • Leontief matrix under water security constraints
  • economic models under water constraints
  • water and computable general equilibrium under water constraints
  • water security and its cost
  • water constraints and water consumer prices
  • water demand and supply curve under water constraints
  • water constraints and water shadow economy
  • water security and the economy
  • water security and the production of goods
  • water security and consumer choice theory

Published Papers (5 papers)

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Research

29 pages, 3943 KiB  
Article
Water Economics: An In-Depth Analysis of the Connection of Blue Water with Some Primary Level Aspects of Economic Theory I
by Kalomoira Zisopoulou, Dimitris Zisopoulos and Dionysia Panagoulia
Water 2022, 14(1), 103; https://0-doi-org.brum.beds.ac.uk/10.3390/w14010103 - 04 Jan 2022
Cited by 12 | Viewed by 5614
Abstract
An analysis of the following aspects of water economics was undertaken: Water as an Economic and Social Good, Modes of Government Intervention, Water Scarcity in Economic Theory and Agricultural Water Management Changes, with the support of over 300 sources. Emphasis was placed on [...] Read more.
An analysis of the following aspects of water economics was undertaken: Water as an Economic and Social Good, Modes of Government Intervention, Water Scarcity in Economic Theory and Agricultural Water Management Changes, with the support of over 300 sources. Emphasis was placed on the connection with primary aspects of economics, in contrast to the usual applicative expositions found in water economics literature. This is a novel approach comparing international bodies’ definitions with economic theory at primary level which leads, upon occasion, to serious contradictions which were exhibited in broad lines. Furthermore, it compares the global implications of these definitions to the existing reality at country level, and a lack of bilateral consistency is exhibited. The uniform picture presented at global level is shown to become a non-uniform one at country level, where sharp variations in resources and availability form a competitive market between nations, and water-rich countries already possessing a competitive advantage are shown to attain a water-based comparative advantage as well. It is shown that although at country level water has a quasi-public good character with minimal private good market existence, this is achieved with the existence of a private goods market at international level via international trade in virtual water. A novel approach to management problems stemming from authority levels starting at global level and ending at farm level is analyzed and redressed by employing reality gap theory. Full article
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51 pages, 4503 KiB  
Article
An In-Depth Analysis of Physical Blue and Green Water Scarcity in Agriculture in Terms of Causes and Events and Perceived Amenability to Economic Interpretation
by Kalomoira Zisopoulou and Dionysia Panagoulia
Water 2021, 13(12), 1693; https://0-doi-org.brum.beds.ac.uk/10.3390/w13121693 - 18 Jun 2021
Cited by 19 | Viewed by 9703
Abstract
An analytical review of physical blue and green water scarcity in terms of agricultural use, and its amenability to economic interpretation, is presented, employing more than 600 references. The main definitions and classifications involved and information about reserves and resources are critically analyzed, [...] Read more.
An analytical review of physical blue and green water scarcity in terms of agricultural use, and its amenability to economic interpretation, is presented, employing more than 600 references. The main definitions and classifications involved and information about reserves and resources are critically analyzed, blue and green water scarcity are examined along with their interchange, while their causal connection with climate in general is analyzed along with the particular instances of Europe, Africa, Asia and the WANA region. The role of teleconnections and evaporation/moisture import-export is examined as forms of action at a distance. The human intervention scarcity driver is examined extensively in terms of land use land cover change (LULCC), as well as population increase. The discussion deals with following critical problems: green and blue water availability, inadequate accessibility, blue water loss, unevenly distributed precipitation, climate uncertainty and country level over global level precedence. The conclusion singles out, among others, problems emerging from the inter-relationship of physical variables and the difficulty to translate them into economic instrumental variables, as well as the lack of imbedding uncertainty in the underlying physical theory due to the fact that country level measurements are not methodically assumed to be the basic building block of regional and global water scarcity. Full article
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13 pages, 1395 KiB  
Article
Assessing the Agricultural Water Savings–Economy–Ecological Environment System in an Arid Area of Northwest China Using a Water Rights Transaction Model
by Tianming He, Chunxia Wang, Zonglan Wang, Xinlin He, Hongguang Liu and Jia Zhang
Water 2021, 13(9), 1233; https://0-doi-org.brum.beds.ac.uk/10.3390/w13091233 - 29 Apr 2021
Cited by 6 | Viewed by 2738
Abstract
As water trading has become increasingly used to optimize the allocation of water resources, it has become necessary to transfer agricultural water allocations for economic development and ecological environmental uses by way of water rights trading. In this paper, we constructed an example [...] Read more.
As water trading has become increasingly used to optimize the allocation of water resources, it has become necessary to transfer agricultural water allocations for economic development and ecological environmental uses by way of water rights trading. In this paper, we constructed an example water rights trading model in the arid oasis area of Shihezi Irrigation District (located in Northwest China), using the field investigation method and governmental water management decisions based on the systems theory of the agricultural water savings–economy–ecological environment. Furthermore, focusing on the added industrial value produced by trading water, the value of the ecological services provided by fresh water, the negative value of the reduction in greenhouse gas emissions, and the negative ecological value of reduced fertilizer application, a quantitative analysis was carried out using the Shihezi Irrigation District as an example. The results showed that under the most stringent water resource management plan and with the objective of returning land and reducing water, the irrigation area can save 52,504,500 m3 of surplus water from the agricultural sector, of which 49,879,300 m3 can be reallocated to the industrial sector and 2,625,200 m3 can be reallocated to the ecological sector. Using the water rights transaction method, this regional agricultural water saving could generate an industrial benefit equal to 35,024,300 yuan, an ecosystem service equal to 19,482,200 yuan, and an overall benefit equal to 54,420,500 yuan. The water rights trading model proposed in this paper for an arid oasis areas can provide a reference for other arid areas, helping to achieve the sustainable economic development of the economic and ecological environments in arid oasis areas through water rights trading. Full article
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22 pages, 3323 KiB  
Article
Multi-Year Index-Based Insurance for Adapting Water Utility Companies to Hydrological Drought: Case Study of a Water Supply System of the Sao Paulo Metropolitan Region, Brazil
by Diego A. Guzmán, Guilherme S. Mohor and Eduardo M. Mendiondo
Water 2020, 12(11), 2954; https://0-doi-org.brum.beds.ac.uk/10.3390/w12112954 - 22 Oct 2020
Cited by 6 | Viewed by 4228
Abstract
The sustainability of water utility companies is threatened by non-stationary drivers, such as climate and anthropogenic changes. To cope with potential economic losses, instruments such as insurance are useful for planning scenarios and mitigating impacts, but data limitations and risk uncertainties affect premium [...] Read more.
The sustainability of water utility companies is threatened by non-stationary drivers, such as climate and anthropogenic changes. To cope with potential economic losses, instruments such as insurance are useful for planning scenarios and mitigating impacts, but data limitations and risk uncertainties affect premium estimation and, consequently, business sustainability. This research estimated the possible economic impacts of business interruption to the Sao Paulo Water Utility Company derived from hydrological drought and how this could be mitigated with an insurance scheme. Multi-year insurance (MYI) was proposed through a set of “change” drivers: the climate driver, through forcing the water evaluation and planning system (WEAP) hydrological tool; the anthropogenic driver, through water demand projections; and the economic driver, associated with recent water price policies adopted by the utility company during water scarcity periods. In our study case, the evaluated indices showed that MYI contracts that cover only longer droughts, regardless of the magnitude, offer better financial performance than contracts that cover all events (in terms of drought duration). Moreover, through MYI contracts, we demonstrate solvency for the insurance fund in the long term and an annual average actuarially fair premium close to the total expected revenue reduction. Full article
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24 pages, 2846 KiB  
Article
Program Outcomes of Payments for Watershed Services in Brazilian Atlantic Forest: How to Evaluate to Improve Decision-Making and the Socio-Environmental Benefits
by Flávio Augusto Monteiro dos Santos, Marcondes Geraldo Coelho-Junior, Jéssica Chaves Cardoso, Vanessa Maria Basso, André Luis de Paula Marques and Eliane Maria Ribeiro da Silva
Water 2020, 12(9), 2441; https://0-doi-org.brum.beds.ac.uk/10.3390/w12092441 - 31 Aug 2020
Cited by 7 | Viewed by 4208
Abstract
In 2014, the Paraíba do Sul River Basin Integration Committee (CEIVAP) established its Pilot Program of Payments for Ecosystem Services (PES), focusing on water resources. The projects from this program share the same goal: to disseminate the use of PES as a tool [...] Read more.
In 2014, the Paraíba do Sul River Basin Integration Committee (CEIVAP) established its Pilot Program of Payments for Ecosystem Services (PES), focusing on water resources. The projects from this program share the same goal: to disseminate the use of PES as a tool for land management in watersheds. Contemplating 11 municipalities, including 84 landowners, conserving 718.63 ha and restoring 188.58 ha, this program was concluded in April 2020. Reviewing its historical and contextualizing features, we have observed that the outcomes from this program extend beyond these numbers. Here, we propose an evaluation methodology comparing the efficiency, performance, and impact of the PES projects. Based on new indicators that are easy to measure, we have identified key elements that have asymmetrically affected the projects. The complexity of the project scope and the execution of high-cost, and risky interventions on rural properties, have resulted in expensive projects with little tangible outputs. Our results support the upgrade of public policy for investment in ecosystem services by CEIVAP in the Paraíba do Sul watershed. In addition, our results can be more successful by improving the decision-making processes for similar projects in other watersheds. Full article
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