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Optimal Conjunctive Use of Groundwater and Recycled Wastewater

Author

Listed:
  • James Roumasset

    () (University of Hawaii, Department of Economics
    University of Hawaii Econonmic Research Organization)

  • Christopher Wada

    () (University of Hawaii Econonmic Research Organization)

Abstract

Inasmuch as water demand is multifaceted, infrastructure planning should be part of a general specification of efficient quantities and qualities of water deliveries over time. Accordingly, we develop a two-sector dynamic optimization model to solve for the optimal trajectories of groundwater extraction and water recycling. For the case of spatially increasing costs, recycled water serves as an intermediate resource in transition to the desalination steady state. For constant unit recycling cost, recycled wastewater eventually supplies non-potable users as a sector-specific backstop, while desalination supplements household groundwater in the steady state. In both cases, recycling water increases welfare by shifting demand away from the aquifer, thus delaying implementation of costly desalination. Implementation of the model provides guidance on the appropriate timing and size of backstop and recycling infrastructure as well as water deliveries from the various sources to the water-demand sectors.

Suggested Citation

  • James Roumasset & Christopher Wada, 2010. "Optimal Conjunctive Use of Groundwater and Recycled Wastewater," Working Papers 201013, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:201013
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_10-13.pdf
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    References listed on IDEAS

    as
    1. Phoebe Koundouri & Christina Christou, 2006. "Dynamic adaptation to resource scarcity and backstop availability: theory and application to groundwater ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, pages 227-245.
    2. Stavins, Robert & Wagner, Alexander & Wagner, Gernot, 2002. "Interpreting Sustainability in Economic Terms: Dynamic Efficiency Plus Intergenerational Equity," Discussion Papers dp-02-29, Resources For the Future.
    3. Huhtala, Anni, 1999. "Optimizing production technology choices: conventional production vs. recycling," Resource and Energy Economics, Elsevier, vol. 21(1), pages 1-18, January.
    4. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-1144, June.
    5. Vernon L. Smith, 1972. "Dynamics of Waste Accumulation: Disposal versus Recycling," The Quarterly Journal of Economics, Oxford University Press, vol. 86(4), pages 600-616.
    6. Stavins, Robert N. & Wagner, Alexander F. & Wagner, Gernot, 2003. "Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity," Economics Letters, Elsevier, vol. 79(3), pages 339-343, June.
    7. Francisco André & Emilio Cerdá, 2006. "On the Dynamics of Recycling and Natural Resources," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 199-221.
    8. Basharat A. Pitafi & James A. Roumasset, 2009. "Pareto-Improving Water Management over Space and Time: The Honolulu Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 138-153.
    9. Chakravorty, Ujjayant & Krulce, Darrell & Roumasset, James, 2005. "Specialization and non-renewable resources: Ricardo meets Ricardo," Journal of Economic Dynamics and Control, Elsevier, vol. 29(9), pages 1517-1545, September.
    10. Darrell Krulce & James A. Roumasset & Tom Wilson, 1997. "Optimal Management of a Renewable and Replaceable Resource: The Case of Coastal Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1218-1228.
    11. Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.
    12. Brozovic, Nicholas & Sunding, David L. & Zilberman, David, 2010. "On the spatial nature of the groundwater pumping externality," Resource and Energy Economics, Elsevier, vol. 32(2), pages 154-164, April.
    13. Majah-Leah Ravago & James Roumasset, 2009. "Economic Policy for Sustainable Growth and Development vs. Greedy Growth and Preservationism," Working Papers 200909, University of Hawaii at Manoa, Department of Economics.
    14. Chakravorty, Ujjayant & Krulce, Darrell L, 1994. "Heterogeneous Demand and Order of Resource Extraction," Econometrica, Econometric Society, vol. 62(6), pages 1445-1452, November.
    15. Costello, Christopher & Polasky, Stephen, 2008. "Optimal harvesting of stochastic spatial resources," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 1-18, July.
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    Cited by:

    1. Shawn Arita & Sumner La Croix & James Mak, 2012. "How Big? The Impact of Approved Destination Status on Mainland Chinese Travel Abroad," Working Papers 2012-3, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    2. repec:eee:resene:v:49:y:2017:i:c:p:186-200 is not listed on IDEAS
    3. James Roumasset & Christopher Wada, 2014. "Groundwater Economics without Equations," Working Papers 2014-8, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    4. James Roumasset & Christopher Wada, 2012. "The Economics of Groundwater," Working Papers 201211, University of Hawaii at Manoa, Department of Economics.
    5. James Roumasset & Christopher Wada, 2013. "Integrating Demand-Management with Development of Supply-Side Substitutes," Working Papers 2013-13, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    6. James Roumasset & Christopher Wada, 2014. "Integrated Groundwater Resource Management," Working Papers 201414, University of Hawaii at Manoa, Department of Economics.
    7. James Roumasset & Christopher A. Wada, 2014. "Energy, Backstop Endogeneity, and the Optimal Use of Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, pages 1363-1371.

    More about this item

    Keywords

    Renewable resources; dynamic optimization; groundwater allocation; wastewater reuse; recycling; reclamation; water quality;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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