Editorial

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Open AccessEditorial

Changing Perspectives on the Economics of Water

by Davide Viaggi, Giacomo Zanni and Meri Raggi

Water 2014, 6(10), 2969-2977; https://0-doi-org.brum.beds.ac.uk/10.3390/w6102969 - 30 Sep 2014

Cited by 6 | Viewed by 6342

This paper provides an overview of the special issue on “Water policy, productivity and economic efficiency”. In particular, it includes an overview of key topics on the future of water as a productive factor, in the context of alternative uses and perspective scenarios. [...] Read more.

This paper provides an overview of the special issue on “Water policy, productivity and economic efficiency”. In particular, it includes an overview of key topics on the future of water as a productive factor, in the context of alternative uses and perspective scenarios. The selected papers cover a wide range of relevant economic issues and are presented in three categories: productivity assessment, institutional framework and mechanisms, and governance aspects. The paper concludes by discussing future research challenges in this field. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

Research

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612 KiB

Open AccessArticle

Simulating Volumetric Pricing for Irrigation Water Operational Cost Recovery under Complete and Perfect Information

by Luca Giraldo, Raffaele Cortignani and Gabriele Dono

Water 2014, 6(5), 1204-1220; https://0-doi-org.brum.beds.ac.uk/10.3390/w6051204 - 07 May 2014

Cited by 9 | Viewed by 6787

Abstract

This study evaluated the implementation of a volumetric and cost-recovery pricing method for irrigation water under symmetric information conditions without the inclusion of implementation costs. The study was carried out in two steps. First, a cost function was estimated for irrigation water supplied [...] Read more.

This study evaluated the implementation of a volumetric and cost-recovery pricing method for irrigation water under symmetric information conditions without the inclusion of implementation costs. The study was carried out in two steps. First, a cost function was estimated for irrigation water supplied by a water user association to a typical Mediterranean agricultural area, based on a translog function. Second, the economic impact of a pricing method designed according to this cost function was simulated using a mathematical programming territorial model for the same agricultural area. The outcomes were compared with those for the current pricing method. The impacts of this pricing method are discussed in terms of its neutral effects on total farm income and, conversely, the importance of the redistributive effects. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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2963 KiB

Open AccessArticle

Integrated Groundwater Resources Management Using the DPSIR Approach in a GIS Environment Context: A Case Study from the Gallikos River Basin, North Greece

by Christos Mattas, Konstantinos S. Voudouris and Andreas Panagopoulos

Water 2014, 6(4), 1043-1068; https://0-doi-org.brum.beds.ac.uk/10.3390/w6041043 - 24 Apr 2014

Cited by 25 | Viewed by 12065

Abstract

The Gallikos River basin is located in the northern part of Greece, and the coastal section is part of a deltaic system. The basin has been influenced by anthropogenic activities during the last decades, leading to continuous water resource degradation. The holistic approach [...] Read more.

The Gallikos River basin is located in the northern part of Greece, and the coastal section is part of a deltaic system. The basin has been influenced by anthropogenic activities during the last decades, leading to continuous water resource degradation. The holistic approach of the Driver-Pressure-State-Impact-Response (DPSIR) framework was applied in order to investigate the main causes and origins of pressures and to optimize the measures for sustainable management of water resources. The major driving forces that affect the Gallikos River basin are urbanization, intensive agriculture, industry and the regional development strategy. The main pressures on water resources are the overexploitation of aquifers, water quality degradation, and decrease of river discharge. Recommended responses were based on the Water Framework Directive (WFD) 2000/60/EC, and sum up to rationalization of water resources, land use management and appropriate utilization of waste, especially so effluent. The application of the DPSIR analysis in this paper links the socioeconomic drivers to the water resource pressures, the responses based on the WFD and the national legislation and is as a useful tool for land-use planning and decision making in the area of water protection. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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230 KiB

Open AccessArticle

An Input-Output Assessment of Water Productivity in the Castile and León Region (Spain)

by Carlos Dionisio Pérez Blanco and Thomas Thaler

Water 2014, 6(4), 929-944; https://0-doi-org.brum.beds.ac.uk/10.3390/w6040929 - 14 Apr 2014

Cited by 25 | Viewed by 9318

Abstract

The failure in the past to acknowledge the limits of water supply and to decouple economic development from water demand has resulted in a water dependent growth model currently threatened by increasing scarcity and droughts. Consequently, there is now an urgent need to [...] Read more.

The failure in the past to acknowledge the limits of water supply and to decouple economic development from water demand has resulted in a water dependent growth model currently threatened by increasing scarcity and droughts. Consequently, there is now an urgent need to use sparse water resources in a more sustainable and efficient way. This demands a comprehensive understanding of water productivity and the linkages among economic sectors to illustrate the tradeoffs in water reallocations from productive sectors to priority uses (household and urban uses). This paper develops a methodology based on the Hypothetical Extraction Method to estimate inter-temporal direct and indirect water productivity. The method is applied to the Spanish region of Castile and León. Results confirm the existence of a relevant water productivity gap between the agriculture (the largest water consumer) and that of the other sectors, which are nonetheless largely dependent on the agricultural output (and thus, on agricultural water demand). Results also show that Gross Domestic Product (GDP) growth, say about 1%, results in an increase of indirect water productivity in the manufacturing blocks (0.49% and 0.38%), energy and water (0.39%) and service blocks (0.41%), providing evidence of the existence of a Verdoorn’s Law for water. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

422 KiB

Open AccessArticle

Do Estimates of Water Productivity Enhance Understanding of Farm-Level Water Management?

by Dennis Wichelns

Water 2014, 6(4), 778-795; https://0-doi-org.brum.beds.ac.uk/10.3390/w6040778 - 27 Mar 2014

Cited by 33 | Viewed by 11026

Abstract

Estimates of water productivity are appearing with increasing frequency in the literature pertaining to agronomy, water management, and water policy. Some authors report such estimates as one of the outcome variables of experiment station studies, while others calculate water productivities when comparing regional [...] Read more.

Estimates of water productivity are appearing with increasing frequency in the literature pertaining to agronomy, water management, and water policy. Some authors report such estimates as one of the outcome variables of experiment station studies, while others calculate water productivities when comparing regional crop production information. Many authors suggest or imply that higher values of water productivity are needed to ensure that future food production goals are achieved. Yet maximizing water productivity might not be consistent with farm-level goals or with societal objectives regarding water allocation and management. Farmers in both rainfed and irrigated settings must address a complex set of issues pertaining to risk, uncertainty, prices, and opportunity costs, when selecting activities and determining optimal strategies. It is not clear that farmers in either setting will or should choose to maximize water productivity. Upon examining water productivity, both conceptually and empirically, using published versions of crop production functions, I conclude that estimates of water productivity contain too little information to enhance understanding of farm-level water management. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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840 KiB

Open AccessArticle

Water Trading: Locational Water Rights, Economic Efficiency, and Third-Party Effect

by Ming-Feng Hung, Daigee Shaw and Bin-Tzong Chie

Water 2014, 6(3), 723-744; https://0-doi-org.brum.beds.ac.uk/10.3390/w6030723 - 24 Mar 2014

Cited by 12 | Viewed by 7198

Abstract

Rivers flow downstream and unidirectionally. However, this fact has not yet been utilized in the institutional design for water trading. By utilizing this characteristic, we first designed a water trading system of “locational water rights.” This new system is able to mitigate the [...] Read more.

Rivers flow downstream and unidirectionally. However, this fact has not yet been utilized in the institutional design for water trading. By utilizing this characteristic, we first designed a water trading system of “locational water rights.” This new system is able to mitigate the return flow-related and instream flow-related third-party effects of volumetric reliability from water transfers. We provided mathematical proof of its economic efficiency. We then applied this water trading system to the case of the Choushui River basin in Taiwan. In this area, agriculture is highly developed while domestic and industrial water demands have increased rapidly. Using an agent-based model simulation, we estimated the potential economic benefits of implementing the system of locational water rights in the Choushui River basin. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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775 KiB

Open AccessArticle

Understanding Subjectivities in the Regulation of Local Water Services: A Q-Methodology Study of Elected Public Officers in Italy

by Alberto Asquer

Water 2014, 6(3), 670-693; https://0-doi-org.brum.beds.ac.uk/10.3390/w6030670 - 24 Mar 2014

Cited by 5 | Viewed by 6835

Abstract

In sub-national governments, elected public officers can exercise considerable influence on the regulation of local water services, in such ways as, for example, contributing to the design of local regulatory institutions, to the formulation of tariff rules, and to the supervision of water [...] Read more.

In sub-national governments, elected public officers can exercise considerable influence on the regulation of local water services, in such ways as, for example, contributing to the design of local regulatory institutions, to the formulation of tariff rules, and to the supervision of water firms. Relatively little we know, however, about how elected public officers think about the regulation of local water services. This Q methodology study provides some evidence of the variety of opinions held on how local water services are delivered, how well they perform, and how they should be regulated among elected public officers in local governments in Italy. The study shows that the policy discourse on water regulation in Italy is highly fragmented into alternative and partially conflicting views. These findings bear some relevance for better understanding sources of stability and change of water regulatory regimes at the local level. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

676 KiB

Open AccessArticle

Inexact Mathematical Modeling for the Identification of Water Trading Policy under Uncertainty

by Xueting Zeng, Yongping Li, Guohe Huang and Liyang Yu

Water 2014, 6(2), 229-252; https://0-doi-org.brum.beds.ac.uk/10.3390/w6020229 - 27 Jan 2014

Cited by 19 | Viewed by 6866

Abstract

In this study, a two-stage inexact credibility-constrained programming (TICP) method is developed for identifying the efficiency of water trading under multiple uncertainties. TICP can tackle uncertainties expressed as probabilistic distributions, discrete intervals and fuzzy sets. It can also provide an effective linkage between [...] Read more.

In this study, a two-stage inexact credibility-constrained programming (TICP) method is developed for identifying the efficiency of water trading under multiple uncertainties. TICP can tackle uncertainties expressed as probabilistic distributions, discrete intervals and fuzzy sets. It can also provide an effective linkage between the benefits to the system and the associated economic penalties attributed to the violation of the predefined policies for water resource allocation. The developed TICP method is applied to a real case of water resource allocation management and planning in the Kaidu-kongque River Basin, which is a typical arid region in Northwest China. Different water resource allocation policies based on changes to the water permit and trading ratio levels are examined. The results indicate that the efficiencies of water trading are sensitive to the degrees of satisfaction (i.e., interval credibility levels), which correspond to different water resource management policies. Furthermore, the comparison of benefits and shortages between trading and non-trading schemes implies that trading is more optimal and effective than non-trading. The results are helpful for making decisions about water allocation in an efficient way and for gaining insight into the tradeoffs between water trading and economic objectives. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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576 KiB

Open AccessArticle

An Assessment of Disproportionate Costs in WFD: The Experience of Emilia-Romagna

by Francesco Galioto, Valentina Marconi, Meri Raggi and Davide Viaggi

Water 2013, 5(4), 1967-1995; https://0-doi-org.brum.beds.ac.uk/10.3390/w5041967 - 27 Nov 2013

Cited by 21 | Viewed by 8525

Abstract

This study develops a methodology for the assessment of disproportionate costs according to the Water Framework Directive guidelines. The originality of the approach lies in the focus on the interdependencies between water bodies and the consideration of the multiple interactions between measures and [...] Read more.

This study develops a methodology for the assessment of disproportionate costs according to the Water Framework Directive guidelines. The originality of the approach lies in the focus on the interdependencies between water bodies and the consideration of the multiple interactions between measures and pressures. However, the broad architecture of the study fits into a wider assessment procedure, already developed in recent studies. Specifically, a cost effectiveness analysis, implemented to select an efficient combination of measures, is integrated with a cost benefit analysis, which allows for the evaluation of the economic feasibility of the proposed actions. This methodology is applied to the Emilia-Romagna Region (Italy). In spite of the uncertainties in the estimations of costs and benefits, the study enables the identification of areas where disproportionate costs are more likely to occur. The results show that disproportionality tends to increase from foothill regions, where most of the functional uses of regional water resources are found, to plain areas, where the sources of pressure tend to be located. Finally, the study offers policy direction for the selection of measures in the case study region. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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458 KiB

Open AccessArticle

Pricing Policies in Managing Water Resources in Agriculture: An Application of Contract Theory to Unmetered Water

by Francesco Galioto, Meri Raggi and Davide Viaggi

Water 2013, 5(4), 1502-1516; https://0-doi-org.brum.beds.ac.uk/10.3390/w5041502 - 27 Sep 2013

Cited by 20 | Viewed by 7220

Abstract

The paper explores how agricultural water pricing could contribute to lowering water demand when uses are unobserved (asymmetric information). The topic of the paper is justified by the fact that most water authorities worldwide do not control water uses at the farm scale. [...] Read more.

The paper explores how agricultural water pricing could contribute to lowering water demand when uses are unobserved (asymmetric information). The topic of the paper is justified by the fact that most water authorities worldwide do not control water uses at the farm scale. The study draws inspiration from the pricing policies of a Reclamation and Irrigation Board in Northern Italy. It analyses the optimal design of current tariff strategies with respect both to the actual regulator’s goals and the cost recovery objective of an ideal regulator driven by European Water Framework Directive principles and having full information. The analysis is based on the logic of a Principal-Agent model implemented as a mathematical non-linear programming model. Given the current pricing structure and assuming zero transaction costs, the results show a relevant increase in net benefits for the ideal scenario with respect to the actual one as water use costs increase. Benefits differences between the two scenarios mark a limit in value below which mechanisms able to solve the existing asymmetries between the principal and the agents are economically desirable. The study concludes by showing that the current regulator’s discriminatory strategy (pricing structure) would be better justified with higher levels of cost for water use. However, the existence of non-zero transaction costs related to the control of water uses points to the need for further research in order to analyze incentive mechanisms in the absence of water metering. Full article

(This article belongs to the Special Issue Water Policy, Productivity and Economic Efficiency)

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