Water Allocation Mechanisms: Principles and Examples

From the earliest times, water resources have been allocated on the basis of social criteria - maintaining the community by ensuring that water is available for human consumption, for sanitation, and for food production. Societies have invested capital in infrastructure to maintain this allocation. Yet social change, including changes in (and more understanding of) how goods are distributed, has produced new issues in water allocation. Population growth has made water scarcity a major problem in many countries and water pollution, while by no means a recent problem, is more widespread than ever before. Traditionally the state has played a dominant role in managing water resources, but inefficient use of water, poor cost recovery for operating and maintenance expenses, the mounting cost of developing new water sources, and problems with the quality of service in agency-managed systems has led to a search for alternatives that make water allocation and management more efficient. The authors address some of the basic principles of treating water as an economic good and of allocating it among the sectors. After outlining the economic principles behind allocating scarce water resources, they review the actual means of various mechanisms used for allocating water, including marginal cost pricing, social planning, user-based allocation, and water markets. Giving examples from experience in several countries, they weigh the pros and cons of different approaches to water allocation, showing that no single approach is suitable for all situations. Clearly that state must play an important regulatory role, for example, but how effectively it does so depends on the relative political influence of various stakeholders and segments of society. User-based allocation is generally more flexible than state allocation, but collective action is not equally effective everywhere; it is most likely to emerge where there is strong demand for water and a history of cooperation. The outcome of market allocation depends on the economic value of water for various uses, but moving toward tradable property rights in water may ease the process of intersectoral reallocation by compensating the"losers"and creating incentives for efficient water use in all sectors

Climate Change and the Stability of Water Allocation Agreements

We analyse agreements on river water allocation between riparian countries. Besides being efficient, water allocation agreements need to be stable in order to be effective in increasing the efficiency of water use. In this paper we assess the stability of water allocation agreements using a game theoretic model. We consider the effects of climate change and the choice of a sharing rule on stability. Our results show that a decrease in mean river flow decreases the stability of an agreement, while an increased variance can have a positive or a negative effect on stability. An agreement where the downstream country is allocated a fixed amount of water has the lowest stability compared to other sharing rules. These results hold for both constant and flexible non-water transfer

Integrated economic-hydrologic water modeling at the basin scale: the Maipo river basin

Increasing competition for water across sectors increases the importance of the river basin as the appropriate unit of analysis to address the challenges facing water resources management; and modeling at this scale can provide essential information for policymakers in their resource allocation decisions. This paper introduces an integrated economic-hydrologic modeling framework that accounts for the interactions between water allocation, farmer input choice, agricultural productivity, nonagricultural water demand, and resource degradation in order to estimate the social and economic gains from improvement in the allocation and efficiency of water use. The model is applied to the Maipo River Basin in Chile. Economic benefits to water use are evaluated for different demand management instruments, including markets in tradable water rights, based on production and benefit functions with respect to water for the agricultural and urban-industrial sectors.Resource allocation., Water resources development Chile., Chile.,

Consolidation of water management and efficiency parameters for development of green building rating system

Water generation and distribution involve activities that leads to energy consumptions in various ways. This leads to GHG emission which make it important for various sustainable development assessment. Hence it is important to develop some consolidated parameters to cover water in building life cycle assessment (LCA). Development of rating system involves the utilisation of some parameters and points allocation. These parameters and points allocation varies between countries and their rating systems. This study aim at reviewing water management and efficiency category and the extent of parameters and points allocation across some rating systems. The purpose of the review is to develop a consolidated parameters that will universally cover building life cycle assessment. Eleven rating scheme’s categories, parameters and points allocation were reviewed. Specifically, water generation, distribution and usage was further elaborated for this study. The parameters were reviewed from the context of their, adaptability, preference, prevalence, relevance and measurability of parameter to suit the universal concept of sustainable building assessment. The review shows that the variations of the parameters and points distribution are based on social, economic and environmental need of the country. The highest parameters and points allocation signifies the need of efficient water generation, distribution and usage and lack of enough fresh water for daily activities. The lowest consideration is due to advancement in sustainable water generation, distribution and usage. The study consolidated the parameters in to nine parameters covering the strategies for reducing unnecessary water usage and other sourcing consequences. They also cover the approximate accounting of GHG emission from water consumption and its reduction. The study can be used by researcher, organisations and countries developing rating schemes. As the study harmonised parameters covered the entire sustainable building and greenhouse gas assessment in term of water generation, distribution and usage

Water allocation policies for the Dong Nai River Basin in Vietnam: an integrated perspective

Recent water sector reforms, increased scarcity and vulnerability of existing water resources, combined with declining public funding available for large-scale infrastructure investment in the sector have led to an increased awareness by the Government of Vietnam for the need to analyze water resource allocation and use in an integrated fashion, at the basin scale, and from an economic efficiency perspective. This paper presents the development, application, and results from an integrated economic-hydrologic river basin model for the Dong Nai River Basin in southern Vietnam that attempts to address these issues. The model framework takes into account the sectoral structure of water users (agriculture, industry, hydropower, households, and the environment), the location of water-using regions, and the institutions for water allocation in the basin. Water benefit functions are developed for the major water uses subject to physical, system control, and policy constraints. Based on this modeling framework, policies that can affect water allocation and use at the basin level, including both basin-specific and general macroeconomic policies, are analyzed.River basin model, water allocation policy, integrated assessment, Vietnam, Dong Nai basin, Water resources Economic aspects,

Water Markets in Mexico: Opportunities and Constraints

In 1992, the Government of Mexico initiated a new national water law which decentralised water resources management and allowed the market transfer of water-use concessions between individual irrigators. These reforms were expected to improve water resources management through greater user participation in irrigation management, as well as to increase irrigators incentives to improve water-use efficiency. At the time of its proposal the 1992 Federal Water Law was considered to the first step in the establishment of limited water markets. This paper addresses the opportunities and constraints to improved water resource use and allocation through the market incentives that result from transferable water-use permits. The paper reviews water allocation institutions in Mexico and provides case studies of water allocation and decision-making.Resource /Energy Economics and Policy,

Improving water use efficiency under worsening scarcity: Evidence from the Middle Olifants sub-basin in South Africa

With the political changes in South Africa in the early 1990s, the South African government introduced a reform process in the entire water sector with the goal of a more enhanced and equitable water management system. This paper analyzes existing water allocation situations and applies a nonlinear optimization model to investigate the optimal intra- and inter-regional allocations in the Middle Olifants sub-basin of South Africa. Results show higher benefit from inter-regional water allocation. Reducing water supply levels to conform to the sustainable water supply policy, it can be shown that although water supply is reduced by approximately 50%, total benefits from water are only reduced by 5% and 11% for inter- and intra-regional allocation regimes respectively. These results indicate that alternative water allocation mechanisms can serve as instruments to offset for the effects of water scarcity.Water allocation, IWRM, Olifants basin, South Africa, Africa, Resource /Energy Economics and Policy,

The river sharing problem: A review of the technical literature for policy economists

Water is essential for life. However, the basic problem of water resource allocation has been that water tends to be over-allocated. Demand for water exceeds the available supply. Essentially, the water economy is bankrupt. Bankruptcy problems have been almost exhaustively studied in the literature on economic theory-primarily from the perspective of cooperative game theory. The main concern of this literature has been how to fairly divide up the assets of a bankrupt entity. In water resource economics cooperative game theory has often been employed as a means of analyzing water resource allocation. It was only recently that the problem of directional flow was incorporated into such analyses. This has come to be known as the “river sharing problem” in the theoretical literature. Accounting for the direction of flow in water resource allocation problems has profound implications for policies that wish to facilitate both fair and efficient water allocations. This is the case whether proposed policies are interventionist or market based in nature. There is now a considerable literature on the allocation and distribution of water resources characterized by unidirectional flow. In this paper I critically review and appraise this literature with a view to making it more accessible to applied and policy economists. A key feature of the paper is that the connection between the bankruptcy literature, which has recently also realized the importance of flow, and the river sharing literature is discussed. The current state of the art in game theoretic models of water resource allocation with directional flow is discussed and implications and consequences for water resource policy highlightedRiver sharing problem, Bankruptcy, Cooperative game theory, Water resouyrce allocation, distributive justice

Cities versus agriculture: revisiting intersectoral water transfers, potential gains and conflicts

Water scarcity / Water demand / Water transfer / Water use / Water supply / Water allocation / Environmental effects / Water market

5G green cellular networks considering power allocation schemes

It is important to assess the effect of transmit power allocation schemes on the energy consumption on random cellular networks. The energy efficiency of 5G green cellular networks with average and water-filling power allocation schemes is studied in this paper. Based on the proposed interference and achievable rate model, an energy efficiency model is proposed for MIMO random cellular networks. Furthermore, the energy efficiency with average and water-filling power allocation schemes are presented, respectively. Numerical results indicate that the maximum limits of energy efficiency are always there for MIMO random cellular networks with different intensity ratios of mobile stations (MSs) to base stations (BSs) and channel conditions. Compared with the average power allocation scheme, the water-filling scheme is shown to improve the energy efficiency of MIMO random cellular networks when channel state information (CSI) is attainable for both transmitters and receivers.Comment: 14 pages, 7 figure