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Analysis of Water Pricing Policy Effects in a Mediterranean Basin Through a Hydroeconomic Model

Author

Listed:
  • Javier Martínez-Dalmau

    (Universidad de Córdoba)

  • Carlos Gutiérrez-Martín

    (Universidad de Córdoba)

  • Alfonso Expósito

    (University of Malaga)

  • Julio Berbel

    (Universidad de Córdoba)

Abstract

This paper explores the impacts of water pricing as a demand management policy, at a regional level (or basin-sector). To this aim, a hydro-economic model for the Guadalquivir River basin (southern Spain) is proposed here. This basin constitutes a perfect example of a Mediterranean basin subject to frequent and long drought periods, where challenges related to water scarcity are increasing, leading to social conflicts among water users. Moreover, this basin is characterised by a closure state meaning that all available water resources are already allocated among users. In this context, water pricing policy may act as an effective tool to reduce water demand by encouraging changes of behaviour in water users. In particular, those who perform irrigation practices in the agricultural sector. This paper focuses on the irrigation sector since it is the main water user in the basin (87%). Additionally, alternative water-availability scenarios have been used to test the effect of water pricing under drought conditions. The hydro-economic model presented here has been sectorized into four basin sectors with common characteristics (hydro and economic). This enables the analysis of alternative price scenarios in the agricultural sector, in terms of water used, crop patterns and gross margin. Results show that water pricing policy should consider the regional characteristics at the basin-sector scale to gain effectiveness and equity at the river basin scale. Moreover, it has been found that both water availability and the crop pattern at the basin-sector scale have an effect on the reduction of water used (and therefore in gross margin.

Suggested Citation

  • Javier Martínez-Dalmau & Carlos Gutiérrez-Martín & Alfonso Expósito & Julio Berbel, 2023. "Analysis of Water Pricing Policy Effects in a Mediterranean Basin Through a Hydroeconomic Model," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(4), pages 1599-1618, March.
    • Handle: RePEc:spr:waterr:v:37:y:2023:i:4:d:10.1007_s11269-023-03446-8
    DOI: 10.1007/s11269-023-03446-8
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    1. Mobin Zarreh & Saeed Yaghoubi & Hamideh Bahrami, 2024. "Pricing of Drinking Water under Dynamic Supply and Demand based on Government Role: A Game-Theoretic Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 38(6), pages 2101-2133, April.
    2. Bennie Grové & Johannes Jacobus Bezuidenhout & Nicolette Matthews, 2023. "Farm-level Hydroeconomic Analysis of Alternative Water Tariff Charges Using a Hybrid Solution Method," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(12), pages 4679-4692, September.
    3. Linjing Ren & Xiaojun Yang, 2023. "Adoption and shift of water-saving strategies to policy shock: based on social-ecological system analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 37(10), pages 4015-4037, August.
    4. Alfonso Expósito & Esther Díaz-Cano & Julio Berbel, 2024. "The Potential use of Reclaimed Water for Irrigation Purposes: Is it Overestimated?," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 38(12), pages 4541-4554, September.
    5. Rossano Belladona & Guilherme Fernandes Marques & Tiago Vargas, 2025. "Determining the Economic Benefit of Watershed Conservation for Urban Water Supply Based on Scarcity rent for Water and Consumer Surplus," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 39(2), pages 795-808, January.

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