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Groundwater and ecosystems damages: Questioning the Gisser-Sánchez effect

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  • Esteban, Encarna
  • Albiac, José
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    Abstract

    Gisser and Sánchez (1980a) state the conditions under which welfare gains from policy intervention are negligible in aquifer management, when compared with non-regulation or "free market" outcomes. This is the so-called Gisser-Sánchez effect (GSE), which has been supported by the ensuing literature during recent decades. The GSE requires a number of assumptions, among which is the disregard for aquatic ecosystems linked and dependent on aquifer systems. The depletion of aquifer systems in arid and semiarid regions worldwide is causing acute water scarcity and quality degradation, and leading to extensive ecosystem damages. This study shows that by including environmental damages into the analytical model, results can change substantially. The analysis highlights both theoretically and empirically the importance of policies in groundwater management, as well as the potential role for stakeholders' cooperation. The empirical application deals with two large aquifers in Spain, the Western La Mancha aquifer which is grossly mismanaged, and the Eastern La Mancha aquifer, which is moving towards sustainable management. Western and Eastern La Mancha aquifers illustrate that policies and institutions are essential to avoid the current global aquifer mismanagement.

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    Bibliographic Info

    Article provided by Elsevier in its journal Ecological Economics.

    Volume (Year): 70 (2011)
    Issue (Month): 11 (September)
    Pages: 2062-2069

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    Handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2062-2069

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    Web page: http://www.elsevier.com/locate/ecolecon

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    Keywords: Groundwater resources Gisser-Sanchez effect Ecosystem damages Sustainability Western La Mancha aquifer Eastern La Mancha aquifer;

    References

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    1. Phoebe Koundouri, 2004. "Current Issues in the Economics of Groundwater Resource Management," Journal of Economic Surveys, Wiley Blackwell, vol. 18(5), pages 703-740, December.
    2. John Hartwick, 1976. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," Working Papers 220, Queen's University, Department of Economics.
    3. Catarina Roseta-Palma, 2003. "Joint Quantity/Quality Management of Groundwater," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(1), pages 89-106, September.
    4. Hellegers, Petra & Zilberman, David & van Ierland, Ekko, 2001. "Dynamics of agricultural groundwater extraction," Ecological Economics, Elsevier, vol. 37(2), pages 303-311, May.
    5. Roseta-Palma, Catarina, 2002. "Groundwater Management When Water Quality Is Endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 93-105, July.
    6. Bill Provencher, 1993. "A Private Property Rights Regime to Replenish a Groundwater Aquifer," Land Economics, University of Wisconsin Press, vol. 69(4), pages 325-340.
    7. Howe, Charles W., 2002. "Policy issues and institutional impediments in the management of groundwater: lessons from case studies," Environment and Development Economics, Cambridge University Press, vol. 7(04), pages 625-641, October.
    8. Burness, H. Stuart & Brill, Thomas C., 2001. "The role for policy in common pool groundwater use," Resource and Energy Economics, Elsevier, vol. 23(1), pages 19-40, January.
    9. Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
    10. Knapp, Keith C. & Baerenklau, Kenneth A., 2006. "Ground Water Quantity and Quality Management: Agricultural Production and Aquifer Salinization over Long Time Scales," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 31(03), December.
    11. Knapp Keith C. & Olson Lars J., 1995. "The Economics of Conjunctive Groundwater Management with Stochastic Surface Supplies," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 340-356, May.
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    Cited by:
    1. Edna Tusak Loehman, 2014. "Social Investment for Sustainability of Groundwater: A Revealed Preference Approach," Sustainability, MDPI, Open Access Journal, vol. 6(9), pages 5598-5638, August.
    2. Skurray, James H., 2013. "The scope for collective action in a large groundwater basin: an institutional analysis of aquifer governance in Western Australia," Working Papers 161075, University of Western Australia, School of Agricultural and Resource Economics.
    3. Kahil, Mohamed Taher & Albiac, José, 2013. "Greenhouse gases mitigation policies in the agriculture of Aragon, Spain," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), issue 1, April.
    4. Encarna Esteban & Ariel Dinar, 2013. "Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(3), pages 443-469, March.

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