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Groundwater and ecosystems damages: Questioning the Gisser-Sánchez effect

  • Esteban, Encarna
  • Albiac, José
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    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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    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
    Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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    1. John Hartwick, 1976. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," Working Papers 220, Queen's University, Department of Economics.
    2. 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.
    3. 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.
    4. 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.
    5. Common, Mick & Perrings, Charles, 1992. "Towards an ecological economics of sustainability," Ecological Economics, Elsevier, vol. 6(1), pages 7-34, July.
    6. 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.
    7. Phoebe Koundouri, . "Current issues in the economics of groundwater resource management," DEOS Working Papers 0402, Athens University of Economics and Business.
    8. 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.
    9. 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.
    10. 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).
    11. 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.
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