This study presents the results of a discrete choice experiment (DCE) to measure the willingness to pay (WTP) for rainwater harvesting systems at the household level in Mexico City. In 2020, we conducted a field survey to estimate WTP for this type of system in the boroughs of Mexico City with medium levels of marginalization. We estimated WTP using various payment options (credit cards, wire transfer, supermarkets and government offices) and considered deferred payment plans, as well as the maintenance time required for the system. We found that credit cards were the preferred payment method, that WTP through deferred payments was low, and that results regarding maintenance time were inconclusive. In addition, differences in gender and educational attainment were found to influence WTP. The mean WTP is $614 USD for a household with a typical user profile. The results indicate that rainwater harvesting systems were not cost-effective in most cases if their cost of public water supply systems. This paper contributes to knowledge of willingness to pay for rainwater harvesting systems, as well as their economic viability in Mexico City. Although the program has the potential to reduce household dependency on the public system, these systems are currently not profitable for most households. They are not a solution to water supply shortages, yet can contribute to climate change adaptation efforts. Additionally, the time required for maintenance and its associated costs are crucial factors in the continued use of the systems.
Water poverty is a global issue and it gets exacerbated by climate change-induced droughts. While the impact of drought on water poverty is well documented, we contribute to the literature by exploring the role played by political connection in shaping households' water poverty in the face of drought. We use two rounds of nationally representative household-level panel data from the India Human Development Survey (2004-05 and 2011-12) to generate a multidimensional water poverty index and a variable representing political connection. The long-term rainfall data from the India Meteorological Department is used to construct the drought variable. Our empirical findings show that drought is positively correlated with households' water poverty. However, the correlation between drought and water poverty is moderated by political connectedness: politically connected households affected by drought have lower water poverty than non-politically connected households who also face drought. An analysis with disaggregated water poverty measure indicates that politically connected households have lower deprivation from access, quality, storage and capacity dimensions of water poverty compared to their non-politically counterparts. A fractional regression analysis with district level data also provides evidence of the moderating impact of political connection proving the consistency of our empirical findings. We recommend initiating specific water poverty alleviation programmes that preclude political elite capture from the distribution of water utility services. We also recommend the Panchayat systems to become more inclusive such that the benefits of water related programmes reach the most vulnerable people to ensure water security.
In the US, environmental protection agencies conduct monitoring and enforcement to induce compliance with environmental laws. If effective, regulated facilities respond by using various environmental management methods to achieve compliance. Our study is the first to examine the collective link from several environmental monitoring and enforcement mechanisms to two fundamental forms of environmental management: environmental treatment equipment and environmental personnel. To deliver our contributions, we exploit an original survey of Clean Water Act-regulated chemical manufacturing facilities that gathers facility-level data on the use of wastewater treatment equipment and environmental personnel. We use these data to jointly estimate a system of two equations - one for environmental equipment and another for environmental personnel - to examine the effects of various monitoring and enforcement mechanisms on environmental equipment and personnel. Our results support two important conclusions. First, we find that, of the mechanisms that significantly impact the use of environmental equipment or personnel, all increase the use of both environmental management practices. Our results, therefore, suggest that environmental equipment and environmental personnel serve as complements, rather than substitutes, for responding to increased enforcement. However, the effects on environmental equipment are much larger. Second, we find that, in general, the more severe mechanisms influence environmental management within one year, while the more cooperative and flexible mechanisms shape management only after a three-year delay. Thus, facilities' responsiveness to monitoring and enforcement depends on the type of mechanism.
An agent-based model (ABM) is developed to simulate the function of lease markets for surface water irrigation rights operating at the watershed scale. The ABM examines the effect of drought on trading activity and gains from trade under three market models: bilateral trading with random matching, a “smart market” that actively matches bidders based on bids and asks, and a full-information optimization model that represents the efficient benchmark against which to assess other market models. The model allows for variation in farm characteristics, water rights seniority, diversion location, and includes a watershed accounting system as a novel component. Results suggest gains from trade and market participation are largest with moderate drought severity than with severe or weak drought. Smart markets provide larger gains than bilateral trade, but both are lower (half or less) than the efficient benchmark. We also show that higher watershed complexity and certain distributions of agents across the watershed can significantly reduce market participation and gains from trade. The applications presented in this paper illustrate the broad applicability of the framework to water resource problems under appropriative water rights systems of the Western United States.
Sustainable river regulations require more information on the costs and benefits of environmental flow constraints. This paper presents a case study focusing on the Nordic electricity market and ecosystem service situation. We impose tighter flow ramping constraints on a hydropower plant situated in the Kemijoki River and quantify the effects of the environmental flow policy on hydropower balancing services, river hydraulics and ecosystem services. Our findings reveal that as the environmental flow policy becomes more stringent, the optimal level of balancing market flexibility for the hydropower operator decreases. In addition, a hydrological flow analysis indicates that ecological improvements resulted from the policy. We compare the costs and benefits of the environmental flow policy. The findings indicate that the costs, hydropower revenue loss and increased system balancing costs are comparable to the willingness to pay for environmental improvements. If system balancing can be achieved without an increase in CO2 emissions, the willingness to pay for the improved river state increases, widening the gap between local benefits and system costs. The study insights can inform policymakers and private companies to better incorporate environmental concerns in the management of regulated rivers while acknowledging the value of hydropower in the power system.
As in many basins worldwide, the imbalance between water supply and demand in the Colorado River Basin, which spans parts of the United States and Mexico, is intensifying due to factors such as climate change and population growth. This paper introduces a novel hydro-economic model encompassing 2.2 million acres of irrigated farmland, 379 cities with a combined population of 33.4 million, and nearly 90 % of the basin's hydropower capacity. The model offers a robust framework for evaluating policy interventions by estimating the value of water across regions and sectors. We find that water use in the basin generates $20.6 billion in annual benefits, $18.3 billion from urban use, $1.4 billion from agriculture, and $874 million from hydropower. Results reveal substantial variation in the marginal value of water within and across states and sectors, providing key insights for designing compensation-based policies and supporting the development of efficient water trading systems.
Controlling the negative externalities of environmental pollution and reducing living costs of residents have long been main societal concerns. With the ongoing deterioration of the ecological environment, understanding the relationship between urban sewage pollution and health expenditures of residents has become increasingly critical. Drawing on extensive theoretical analysis, this study employs data from 266 Chinese cities spanning the period from 2012 to 2022 to investigate the health cost effect of urban sewage pollution. The findings reveal that urban sewage pollution not only significantly increases health expenditures of local residents but also exerts a positive spatial spillover effect on the health expenditures of surrounding residents. Education, advanced industrial structure, medical insurance, and agricultural mechanization can linearly and negatively mitigate the impact of urban sewage pollution. The local and spatial moderating effect of economic development exhibit an inverted U-shape. Furthermore, advanced industrial structure, agricultural mechanization and highly coordinated river management systems with clear accountability effectively suppress the negative externalities associated with urban sewage pollution. This study, which provides a scientific basis for accurately assessing the health costs of urban sewage pollution, is conducive to building a "green defense line" for residents' health expenditures and facilitating the achievement of the Sustainable Development Goals of United Nations.
Groundwater irrigation is critical for supporting food security, rural livelihoods, and economic development in the Eastern Indo-Gangetic Plains (EIGP) of South Asia. However, groundwater resources in the EIGP remain underutilized due to farmers' reliance on expensive diesel pumps for accessing water. This study uses primary household survey data from the Terai region of Nepal to analyse the drivers of variability in irrigation access costs across farms, and how these cost variabilities influence agricultural outcomes. We employ an endogenous switching regression model to assess the impacts of pump ownership on farm productivity and profitability. Our findings show that pump ownership reduces irrigation costs rice and wheat cultivation, the region's two major crops, by 72 % and 76 %, respectively, and increases rice and wheat productivity by 37 % and 20 %, respectively. Our findings provide empirical evidence of the positive impact of technology ownership on agricultural productivity and highlight the opportunities for policy interventions focused on improving performance of existing technologies for enabling long-term sustainable intensification of irrigated agriculture in the EIGP.
Residents tend to respond to perceived water price rather than the true water price when making household water consumption decisions. The paper estimates household perception bias on the average water price and explores its impact on the adoption of daily water-saving practices, by using the unique 5449 household survey data across 50 cities in China. The bias refers to the discrepancy between perceived price and the true average price. Results from the multi-level regression model show that households can hardly perceive the true average water price accurately. Approximately 71.5 % of households underestimate the true average price to varying degrees. On average, households underestimate the true average water price by 19.3 %, which is equivalent to 0.761 Yuan per ton. There are asymmetric impacts of household perception bias. For one thing, only the underestimation bias significantly impacts on the adoption of both technical and behavioral water-saving measures. For another, it hinders the adoption of technical measures among high water consumption households, while it impedes the adoption of behavioral measures among low water consumption households. Among a total of seven machine learning classification algorithms, the Random Forest binary classifier, based on ten easilyanswered feature questions, demonstrates the best performance in identifying households with underestimation bias. It constitutes a promising policy tool to implement information treatment on households with underestimation bias. It can facilitate water conservation resulting from downward perception bias, particularly by tapping into the greater water-saving potential of technical water-saving measures and high water consumption households.
The Seasonal Land Fallowing Policy (SLFP) is conducted in the North China Plain to address severe groundwater overdrafts. Optimal compensation standards, fallow duration, and reallocating the saved labor to other employment may enhance SLFP's economic sustainability, while planting green manure crops on fallow land promotes its ecological sustainability. However, unclear farmers' preferences for these policy attributes and supporting measures hinder policymakers from implementing more sustainable SLFP schemes. Based on a choice experiment survey with 716 farmers in Hebei province, our estimation indicates that farmers prefer an SLFP scheme with higher compensation, longer fallow durations, and employment support, but are reluctant to plant green manure crops. Based on the results, the compensation level can be reduced from 500 yuan/mu/year to 460 yuan/mu/year if the current SLFP scheme continues to be implemented. More economically and ecologically sustainable SLFP schemes can be achieved with longer fallow durations and the provision of employment support. Additionally, this study explicitly explores the heterogeneity of preferences for the SLFP scheme between small-scale and large-scale farmers in China and proposes differentiated SLFP schemes for each group.
The Recast Drinking Water Directive (Dir. (EU) 2020/2184) aims to set a 15 % target limit for urban network losses. Research in this field is crucial for the advancement of EU policy directives aimed towards augmenting water efficiency and conservation in a context of increasing water scarcity. This paper examines the synergies between leakage reduction and water demand policies (water pricing vs. social awareness). In order to estimate the impact of such policies on the achieved water savings, a simple model is presented and applied to the case study of the city of Seville in southern Spain. This case represents an interesting example of continuous efforts towards reducing urban water abstraction in the last three decades. The results offer useful insights into the effectiveness of various policy strategies on the overall water-saving achievements in a context of increasing water scarcity and cyclical drought episodes.
To address water shortages arising from the 2015 drought in Korea, the water authority (K-water) implemented a water savings subsidy between October 2015 and January 2016. This policy incentivized reduced consumption by offering households a rebate for each unit of water saved compared to the same month in the previous year. The rate of subsidy was 1240 KRW/m3 (approximate to$1.10/m3) which was roughly 2.5-3 times larger than the water rate for the first block in most of municipalities. This study attempts to measure the effectiveness of the intervention and finds that it generated a roughly 4%-6% reduction in water use. We find that households consuming relatively more water (3rd and 4th quartiles in terms of baseline water consumption) reduced their use by 6.1% but households consuming relatively less water (1st quartile) reduced their use by 4%. Interestingly, there is little evidence that property value affects the reduction in water use with the intervention.
The rapid industrialization of developing countries has led to irrational water usage and over-exploitation, exacerbating global water scarcity. While resource tax represents a well-established policy instrument, its micro-level effectiveness in water resource management remains empirically understudied. This paper employs differences-in-differences method to comprehensively evaluate the impacts of China’s water resource tax on environmental performance improvements of micro-enterprises. With a panel data from 456 listed firms in water-intensive industries in China from 2012 to 2022, this paper finds that water resource tax significantly enhances environmental performance, with green innovation serving as a crucial mediating mechanism. By uniquely controlling for concurrent water pollution charging systems, our analysis reveals the comparative advantage of tax-based approaches. The results demonstrate pronounced heterogeneous effects: the policy's impact is most significant in the mining sector, followed by manufacturing, while showing negligible effects in power and electricity sectors. Additionally, non-state-owned enterprises and small-scale firms exhibit stronger environmental improvements. This study contributes existing literature by providing robust micro-level evidence of water resource tax effectiveness, employing current official classifications of water-intensive industries to avoid policy impact underestimation, and establishing robust causal relationships through rigorous econometric testing. These nuanced findings provide insights for policymakers in developing nations facing water resource challenges, offering an evidence-based blueprint for implementing targeted regulatory approaches and calibrating sector-specific environmental policies.
Climate change and population growth exacerbate water scarcity in the Mediterranean region, threatening food security. A variety of modeling approaches that embed water into a Computable General Equilibrium (CGE) framework is available. However, only a few studies incorporate non-conventional, alternative water sources (e.g., desalination, treated, brackish) into economic analyses. Alternative water sources vary in energy and capital intensity and, therefore, in costs and externalities. We present the first study to introduce alternative water sources to a global CGE model. We also investigate the role of novel technologies of controlled-environment agriculture (CEA) that save water and land at the cost of higher energy intensity than traditional agriculture practices. The results show that the availability of alternative water sources increases the domestic production of grain crops in the North Mediterranean region. The countries that gain the most from CEA technologies are those with a higher share of irrigation and skilled labor. The results reflect the significant value of alternative water sources and CEA technologies to the agricultural sector. The outcomes also indicate that alternative water practices and CEA may bring about a positive trajectory in food security and the global economy, with a negligible effect on energy use.
Nature-based solutions have gained recognition as viable strategies for climate adaptation, particularly in urban areas to reduce flooding. One solution to improve flood management is opening up streams in residential areas, reversing the historical practice of channeling streams into underground pipes. In a contingent valuation survey, we examine local residents' preferences for reopening a stream. We assess residents' willingness to pay (WTP) for two distinct reopening plans: one embracing a green and natural solution, and the other adopting a grey and urban solution. The results reveal a strong preference for the nature-based stream, underscoring the significance of community engagement when developing flood management strategies. The elicited WTP estimates for the nature-based stream highlight significant nonmarket benefits to the community, amounting to a present value of approximately NOK 11.5 million. Prioritizing such nature-based solutions could enhance local welfare and align with local preferences. However, the costs associated with developing the nature-based stream are high, and the elicited nonmarket benefits do not exceed these costs. This conclusion should be interpreted with caution, given limitations of the study. Further research is needed to establish whether similar projects would pass the benefit-cost test.
The design of mechanisms for sustainable irrigation water management requires a deep understanding of the water value for local communities. We present results from a lab-in-the-field incentivized game that sheds light on valuation patterns of irrigation water, relative to its value in the game, among small farmers in Colombia. In this game, two players divide a jointly endowed agricultural land plot, with some pieces having direct access to irrigation water. Although the induced cost of irrigation water in our game was one token, farmers paid between 2.1 and 3.5 times this amount. We characterize a general bargaining game that can be used to identify valuation discrepancies in settings with relevant use conflicts.
Water is not only vital for human life but also is a critical economic input. Climate change will likely exacerbate conflicts over the multiple uses of water in Latin America. This study compares direct water requirement patterns among Brazil, Colombia, and Costa Rica between 2013 and 2017, applying an environmental-extended Structural Decomposition Analysis. While all countries experienced increased water consumption during the period, Brazil's and Colombia's results suggest gains in water productivity at the national level and for Agriculture. Results also indicate that Exports are the main water consumption driver of Agriculture in Brazil and Costa Rica. The Water and sanitation sector in Colombia experienced a decrease in direct water requirements, which is illustrated by a strong negative intensity effect. In contrast, an expressive positive intensity effect in Costa Rica resulted from a sectoral GDP fall. The findings of this study offer support to sectoral climate adaptation plans in all countries as well as water conservation and sustainable development policies.
The Lower Mekong delta of Vietnam, particularly Can Tho city, is highly susceptible to flooding which urgently calls for significant efforts to mitigate urban flood risks. A possible measure to reduce flood risk is the application of controlled embankment breaches (CEB) in a rural province upstream. Utilising a Protection Motivation Theory approach, this paper uses a contingent valuation to assess the welfare effects of a reduction of flood risks in the city resulting from CEB in the upstream region of the delta. The findings revealed that households residing in the downstream areas of Vietnamese Mekong Delta were willing to financially support the implementation of the CEB upstream in An Giang city, as a measure to alleviate urban flood threats in Can Tho city. These results suggest that interregional cooperation, involving the concept of payments for watershed services between regional jurisdictions, may help to effectively mitigate flood risk in a low-lying population centre in a major river delta. As such, these findings can inform policies for urban flood risk mitigation regarding the development of a more comprehensive flood risk reduction strategy in similar geographical contexts.
The effectiveness of groundwater in fulfilling crop water deficits depends on its quality and quantity. This paper examines the relationship between irrigators’ stated concerns over groundwater quality and groundwater quantity and their past water use and cropping decisions. Information on irrigator concerns over groundwater quality and quantity is obtained from 626 survey responses of agricultural producers in the Kansas portion of the High Plains Aquifer. We combine 20 years of field-level water use and cropping data with each of the 626 survey responses. We find that irrigators indicating elevated concern over either groundwater quality or groundwater quantity correlates with less total water use, fewer total irrigated acres, and fewer acres of irrigated corn. Additionally, concerns over groundwater quantity generally correlate with a greater reduction in water use along multiple water use margins compared to equal concerns over groundwater quality.
