Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities
This paper investigates how cooperation among users can achieve a better management of groundwater in the presence of environmental externalities. Cooperation allows users to internalize the damages caused by their activities and reduce extractions. The paper develops a game theoretical framework to assess the value of cooperation in an aquifer that is divided into three sub-aquifers that are being overly exploited. Two types of externalities are modeled: first, water extractions in each sub-aquifer impact water levels in neighboring sub-aquifers (extraction externality). Second, the three sub-aquifers are also connected to an ecosystem and thus decisions in each sub-aquifer affect the health of the ecosystem (environmental externality). A cooperative game theory model is applied. The model empirically shows how the uncontrolled extractions in each sub-aquifer affects neighboring groundwater users but also cause severe impacts to the linked ecosystem. The model is tested empirically in one of the most important aquifers in Spain, the Eastern la Mancha aquifer. The results illustrate how both extraction and environmental externalities interact in affecting the likelihood of cooperation among the users. The paper estimates the value of cooperation and its stability with and without the environmental externality. Copyright Springer Science+Business Media B.V. 2013
Volume (Year): 54 (2013)
Issue (Month): 3 (March)
|Contact details of provider:|| Web page: http://www.springerlink.com/link.asp?id=100263|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- James Roumasset & Christopher Wada, 2010.
"Optimal and Sustainable Groundwater Extraction,"
201009, University of Hawaii at Manoa, Department of Economics.
- C M Dufournaud & J J Harrington, 1990. "Temporal and spatial distribution of benefits and costs in river-basin schemes: a cooperative game approach," Environment and Planning A, Pion Ltd, London, vol. 22(5), pages 615-628, May.
- Rubio, Santiago J. & Casino, Begona, 2001. "Competitive versus efficient extraction of a common property resource: The groundwater case," Journal of Economic Dynamics and Control, Elsevier, vol. 25(8), pages 1117-1137, August.
- Pongkijvorasin, Sittidaj & Roumasset, James & Duarte, Thomas Kaeo & Burnett, Kimberly, 2010.
"Renewable resource management with stock externalities: Coastal aquifers and submarine groundwater discharge,"
Resource and Energy Economics,
Elsevier, vol. 32(3), pages 277-291, August.
- Sittidaj Pongkijvorasin & James Roumasset & Thomas Kaeo Duarte & Kimberly Burnett, 2008. "Renewable Resource Management with Stock Externalities: Coastal Aquifers and Submarine Groundwater Discharge," Working Papers 200808, University of Hawaii at Manoa, Department of Economics.
- Barbier, Edward B., 2000. "Valuing the environment as input: review of applications to mangrove-fishery linkages," Ecological Economics, Elsevier, vol. 35(1), pages 47-61, October.
- Ostrom, Elinor, 2009.
"Beyond Markets and States: Polycentric Governance of Complex Economic Systems,"
Nobel Prize in Economics documents
2009-4, Nobel Prize Committee.
- Elinor Ostrom, 2010. "Beyond Markets and States: Polycentric Governance of Complex Economic Systems," American Economic Review, American Economic Association, vol. 100(3), pages 641-72, June.
- Tarui, Nori & Mason, Charles F. & Polasky, Stephen & Ellis, Greg, 2008.
"Cooperation in the commons with unobservable actions,"
Journal of Environmental Economics and Management,
Elsevier, vol. 55(1), pages 37-51, January.
- Nori Tarui & Charles Mason & Stephen Polasky & Greg Ellis, 2007. "Cooperation in the Commons with Unobservable Actions," Working Papers 200711, University of Hawaii at Manoa, Department of Economics.
- Gren, Ing-Marie, 1995. "The Value of Investing in Wetlands for Nitrogen Abatement," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 22(2), pages 157-72.
- Stephen Polasky & Nori Tarui & Gregory Ellis & Charles Mason, 2006. "Cooperation in the commons," Economic Theory, Springer, vol. 29(1), pages 71-88, September.
- Woodward, Richard T. & Wui, Yong-Suhk, 2001. "The economic value of wetland services: a meta-analysis," Ecological Economics, Elsevier, vol. 37(2), pages 257-270, May.
- Esteban, Encarna & Albiac, José, 2011. "Groundwater and ecosystems damages: Questioning the Gisser-Sánchez effect," Ecological Economics, Elsevier, vol. 70(11), pages 2062-2069, September.
- Satya N. Yadav, 1997. "Dynamic Optimization of Nitrogen Use When Groundwater Contamination Is Internalized at the Standard in the Long Run," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 931-945.
- Nash, John, 1953. "Two-Person Cooperative Games," Econometrica, Econometric Society, vol. 21(1), pages 128-140, April.
When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:54:y:2013:i:3:p:443-469. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.