The Watershed Economics Management Approach: An Application to Cyprus

Ben Groom, Phoebe Koundouri () and Timothy Swanson

No 311, DEOS Working Papers from Athens University of Economics and Business

Abstract: This paper develops a 'watershed economics approach' to resource allocation, which ensures that scarce water resources are allocated between competing demands in a way that maximises their contribution to societal welfare. This approach is constructed in a way that considers its impacts on all groups and interests affected, which requires the integration of various approaches and perspectives into a single systematic framework. It is composed of two important stages. In Stage I economic valuation techniques are used to establish the economic value of the competing demands for surface and groundwater, incorporating where necessary an analysis of water quality. This allows the objective balancing of demands based upon the equi-marginal principle to achieve economic efficiency. In Stage II a policy impact analysis addresses issues of social equity, the value of water for environmental/ecological purposes and legal and institutional aspects. The analysis is undertaken within the confines of the watershed and is encapsulated by a case study of the Kouris watershed in Cyprus.

Keywords: watershed economics approach; integrated (interdisciplinary) water management; economic valuation; water demand estimation; environmental valuation; policy impact analysis (search for similar items in EconPapers)
Date: 2003-12-30
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Citations: View citations in EconPapers (6)

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