Water Resources and Economics最新文献

This paper studies the relationship between drinking water contamination and treatment costs using a panel data for Norwegian local governments in the period 2003–2021. Because contamination and costs affect each other, we derive and estimate a set of reduced form equations that take the two-way causality into account. Our results indicate that while post-treatment contamination has little if any effect on treatment costs, increased expenditures reduce contamination in the following years.

While ongoing climate change requires effective adaptation strategies, decision-making on the scale, timing and location of adaptation measures remains challenging, as the extent and pace of climate change is uncertain. In particular, uncertainty surrounds the success of mitigation strategies and economic and demographic developments. While ‘grey’ measures, such as dikes and pumping, have been the dominant form of adaptation in the past against inland flooding, Nature-based Solutions are receiving more attention. However, evidence on their cost-effectiveness compared to grey alternatives is still limited. In this article, we develop a real options model that integrates climate change uncertainty as well as flexibility of the timing of investment. We expect that the uncertainty falls over time due to an increase in climate data that becomes available to the decision-maker. The decision-maker learns about climate change from two types of events: inland flooding and meteorological drought. The model is calibrated with data from the Oldambt–Eemskanaal–Dollardboezem water system in the Dutch Province of Groningen. Our results show the potential for Nature-based Solutions to become a viable alternative to dike heightening and pumping in addressing both extreme events. Moreover, we observe that the cost-effectiveness of Nature-based Solutions depends on the maturing time of the ecosystem, the value of land on which the measure is being implemented, and the type of information considered in the investment decision. We show that maturing times of up to nine years make a Nature-based Solution the preferred measure to invest in, even under strong beliefs of severe climate change. When maturing times exceed nine years, the option takes too long to become effective and pumping is preferred. Furthermore, our results show that an increase in the value of land on which a Nature-based Solution is being constructed may substantially reduce its cost-effectiveness. Finally, decision-making flexibility becomes valuable if expected damages from floods and droughts are sufficiently low and the decision-maker learns quickly about climate change.

Freshwater scarcity is worsening as we quickly approach the freshwater planetary boundary. There has been extensive research and policy development in the space of water scarcity, pollution and accessibility, centered around the Sustainable Development Goals (SDGs). A large body of literature examines household and climate characteristics predictive of water consumption by households. However, there does not appear to be any research on the role of views of and proximity to water bodies in household water consumption. In this paper, we develop a simple model of water consumption which depends on the perceptions of water scarcity and the perceptions of whether water scarcity is an issue. Using geographic information systems (GIS) viewshed analysis, we model whether properties in Tauranga, New Zealand, have views of lakes and the coast. We then use these variables in an SA1 unit fixed effects model of water consumption. We find that views of lakes are associated with higher water consumption and views of the coast are associated with lower water consumption. We suggest that these associations are driven by psychological biases which alter the perceptions of water scarcity and concern for water scarcity. We deploy a range of robustness checks and argue that our results may be causal, though further research is required to confirm this.

Payments for watershed services (PWS) programs have become a prominent approach to protect or restore ecosystems and watershed services but little is known about where these innovative financing tools and governance systems emerge and persist. In 2008, the Mexican government launched a program where they matched funding from local partners to establish user-financed PWS, leading to the creation of 145 programs between 2008 and 2019. We study the factors related to the emergence and persistence of these local, user-financed PWS programs across Mexico. We assemble a unique database on these programs, as well as biophysical, economic, socio-cultural, and institutional variables, at the municipality level. We use logistic regression to analyze the variables correlated with the emergence and persistence of PWS. We find that PWS programs are more likely to emerge in municipalities with lower opportunity costs of forest conservation; that are wealthier; that have higher institutional capacity; and that have more collective land tenure and protected areas. PWS programs are more likely to persist in municipalities where watershed conditions are a concern; that have more wealth and institutional capacity; and that have a non-governmental organization or water utility involved as the local counterpart. These results suggest that emergence and persistence of local, user-financed PWS programs to address water security can occur when the opportunity costs of conservation are met; the provision of ecosystem services is enhanced; there are sustainable sources of financing; and there is institutional capacity that involves non-state actors.

We nudged households in Torbat Heydarieh, a city in Iran, with social comparison and public environmental messages to decrease water consumption. In the former treatment, we provided subjects with their actual water consumption compared to their neighborhood’s minimum and average consumption. In the latter one, we illustrated some facts about the water crisis in Iran and each individual’s potential role in dropping it. We also incorporated perceptions and attitudes of our subjects on water consumption, extracted from our survey, to control for their possible impacts. Our results show that the social comparison nudge lessens the daily water usage of each family member by about 30 percent. In contrast, a nudge with public environmental messages does not have any effect.

This paper assesses the WTP and WTA for improvements and deteriorations, respectively, in irrigation water supply reliability. The assessment relies on a double-sided discrete choice experiment valuation using latent-class modeling accounting for preference and scale heterogeneity. This valuation approach is empirically implemented using a case study of a Spanish irrigated district significantly impacted by climate change. The results obtained show individual-specific preference heterogeneity in the WTA-WTP disparity, primarily driven by the different impacts of water reliability on farmers' utility (changes in business revenues and costs, uncertainty in business performance, and farm income effects) and interindividual differences in loss aversion (different degrees of endowment effect). Additionally, the significant scale heterogeneity and ordering effects found suggest that it may be advisable to use modeling approaches that account for them. Several policy-relevant implications can be drawn, including the non-neutrality of the initial allocation of property rights, repercussions on the cost-benefit of climate change adaptation measures, and the need to account for irrigators’ preference heterogeneity in order to design successful market-based instruments.

Water scarcity can constrain industrial development, while industrial development can exacerbate the high consumption of industrial water, resulting in the industrial water rebound effect. This study measures the economic contribution of industrial water to industrial economic growth with the help of the Cobb-Douglas Production Function. Then industrial water rebound effect is estimated in the context of technological progress. The empirical results suggest that the production elasticity of industrial water in the Yangtze River Delta is 0.121 and the industrial water rebound effect is 55.11%. Particularly, Shanghai has achieved industrial economic growth by strictly controlling the total amount of water use. While Anhui has the higher economic contribution of industrial water, its industrial economic growth mainly relies on water input. The overall industrial water rebound effect is relatively prominent in Zhejiang, Anhui and Jiangsu. Accordingly, the Yangtze River Delta urgently needs to advocate the development of the water economy, strengthen the rigid constraints on water use indicators, and promote water use efficiency in industrial enterprises.

In this paper, I investigate the joint impacts of top-down targets and social opprobrium on aggregate compliance with government mandates for resource conservation. I use data on urban water usage, local agency enforcement, and reports of water waste by private citizens in California during a period of severe drought in which a year-long mandate for water conservation was imposed. During the mandate, private citizens engaged in opprobrium by “drought shaming” customers engaged in “water waste.” I find that increases in complaints regarding water waste led to increases in follow-up actions by local agencies, increased levels of cumulative water conservation, and increased compliance with state-mandated targets. The findings suggest that private citizen involvement in the form of social opprobrium is an important aspect of local agency compliance.