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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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    File URL: http://www.sciencedirect.com/science/article/pii/S0921800911002369
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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

    Related research

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

    References

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    1. 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.
    2. 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.
    3. Koundouri, Phoebe, 2004. "Current issues in the economics of groundwater resource management," MPRA Paper 38425, University Library of Munich, Germany.
    4. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December.
    5. 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.
    6. 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.
    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. Hellegers, Petra J.G.J. & Zilberman, David & van Ierland, Ekko C., 2001. "Dynamics Of Agricultural Groundwater Extraction," 2001 Annual meeting, August 5-8, Chicago, IL 20446, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. 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.
    10. 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.
    11. Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
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    Cited by:
    1. 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.
    2. 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.
    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.

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