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Water Price and Water Sectoral Reallocation in Andalusia. A Computable General Equilibrium Approach1

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  • Cardenete, Manuel Alejandro
  • Hewings, Geoffrey

Abstract

The objective of this work is to analyze the effects that an increase in the price of the water delivered to the agriculture sector to promote the conservation of this resource would have on the efficiency of the consumption of water and the possible reallocation of water to the remaining productive sectors. The analysis is motivated by the fact that the agriculture consumes a disproportionately large amount of water at very low prices –subsidized-. The methodology that will be used to explore the implications on the economy will be a computable general equilibrium model (CGE), previously designed for an analysis of the direct taxes of the Andalusian economy (Cardenete and Sancho, 2003), but now enhanced and extended to include emissions of pollutants and the introduction of environmental taxes (André, Cardenete and Velázquez, 2005). This model has been further modified to introduce the variations in the water price that we will try to analyze by means of a tariff applied on the production structure. The main conclusion drawn indicates that, although the tax policy applied does not correspond to a significant water saving in the above-mentioned sector, a reallocation of this resource is achieved which seems to generate a more efficient and more rational behavior from a production point of view.

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  • Cardenete, Manuel Alejandro & Hewings, Geoffrey, 2011. "Water Price and Water Sectoral Reallocation in Andalusia. A Computable General Equilibrium Approach1," 2011 Conference: Impacts of Climate Change on Agriculture, December 6-7, 2011, Rabat, Morocco 188124, Moroccan Association of Agricultural Economics (AMAEco).
    • Handle: RePEc:ags:morc11:188124
    DOI: 10.22004/ag.econ.188124
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    References listed on IDEAS

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    5. Francisco André & M. Cardenete & Esther Velázquez, 2005. "Performing an environmental tax reform in a regional economy. A computable general equilibrium approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(2), pages 375-392, June.
    6. Doppler, Werner & Salman, Amer Z. & Al-Karablieh, Emad K. & Wolff, Heinz-Peter, 2002. "The impact of water price strategies on the allocation of irrigation water: the case of the Jordan Valley," Agricultural Water Management, Elsevier, vol. 55(3), pages 171-182, June.
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    9. Hewings, Geoffrey J.D. & Dridi, Chokri & Guilhoto, Joaquim J.M., 2005. "Impacts of reallocation of resource constraints on the northeast economy of Brazil," MPRA Paper 38210, University Library of Munich, Germany.
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    Cited by:

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    3. Na Li & Xiaojun Wang & Minjun Shi & Hong Yang, 2015. "Economic Impacts of Total Water Use Control in the Heihe River Basin in Northwestern China—An Integrated CGE-BEM Modeling Approach," Sustainability, MDPI, vol. 7(3), pages 1-19, March.
    4. Teotónio, Carla & Rodríguez, Miguel & Roebeling, Peter & Fortes, Patrícia, 2020. "Water competition through the ‘water-energy’ nexus: Assessing the economic impacts of climate change in a Mediterranean context," Energy Economics, Elsevier, vol. 85(C).
    5. Manuel Alejandro Cardenete Flores & Luz Dary Beltrán Jaimes & Paula Villegas, 2024. "La sequía en Andalucía: análisis del impacto económico y evaluación del Plan SOS," Revista de Estudios Regionales, Universidades Públicas de Andalucía, vol. 3, pages 177-197.

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