EconPapers    
Economics at your fingertips  
 

Managing Water Scarcity at a River Basin Scale with Economic Instruments

Carlos Gomez (), C. D. Pérez-Blanco, David Adamson () and Adam Loch
Additional contact information
C. D. Pérez-Blanco: #x2021;Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC), RAAS Division, Isola di San Giorgio Maggiore, 8. 30124 Venice, Italy§Fondazione Eni Enrico Mattei (FEEM), Isola di San Giorgio Maggiore, 8. 30124 Venice, Italy
Adam Loch: #xB6;Centre for Global Food and Resources, The University of Adelaide, Adelaide, Australia

Water Economics and Policy (WEP), 2018, vol. 04, issue 01, 1-31

Abstract: This paper presents a conceptual framework for both assessing the role of economic instruments, and reshaping them in order to enhance their contribution to the goals of managing water scarcity. Water management problems stem from the mismatch between a multitude of individual decisions, on the one hand, and the current and projected status of water resources on the other. Economics can provide valuable incentives that drive individual decisions, and can design efficient instruments to address water governance problems in a context of conflicting interests and relevant transaction costs. Yet, instruments such as water pricing or trading are mostly based on general principles of welfare economics that are not readily applicable to assets as complex as water. A flaw in welfare economic approaches lies in the presumption that economic instruments may be good or bad on their own (e.g., finding the “right” price). This vision changes radically when we focus on the problem, instead of the instrument. In this paper, we examine how economic instruments to achieve welfare-enhancing water resource outcomes can realize their full potential in basin-scale management contexts. We follow a political economy perspective that views conflicts between public and private interest as the main instrumental challenge of water management. Our analysis allows us to better understand the critical importance of economic instruments for reconciling individual actions towards collective ambitions of water efficiency, equity and sustainability with lessons for later-adopting jurisdictions. Rather than providing panaceas, the successful design and implementation of economic instruments as key river basin management arrangements involves high transaction costs, wide institutional changes and collective action at different levels.

Keywords: Economic instruments; river basin management; political economy; water policy (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S2382624X17500047
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wepxxx:v:04:y:2018:i:01:n:s2382624x17500047

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2382624X17500047

Access Statistics for this article

Water Economics and Policy (WEP) is currently edited by Ariel Dinar

More articles in Water Economics and Policy (WEP) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().

 
Page updated 2019-10-03
Handle: RePEc:wsi:wepxxx:v:04:y:2018:i:01:n:s2382624x17500047