The Full Economic Cost of Groundwater Extraction
When a groundwater basin is exploited by a large number of farmers, acting independently, each farmer has little incentive to practice conservation that would primarily benefit other farmers. This can lead to excessive groundwater extraction. When...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101206131004 http://hdl.handle.net/10986/3976 |
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okr-10986-39762021-04-23T14:02:14Z The Full Economic Cost of Groundwater Extraction Strand, Jon AGRICULTURAL PRODUCTION AGRICULTURAL WATER AGRICULTURAL WATER USE AQUIFER AQUIFERS BASINS CALIBRATION CONSERVATION DEEP WELLS DEMAND FOR WATER DISCHARGE ELECTRICITY ELECTRICITY CONSUMPTION FARMERS FLOW RATE FOSSIL WATER GROUND WATER GROUNDWATER GROUNDWATER BASINS GROUNDWATER EXTRACTION GROUNDWATER IRRIGATION GROUNDWATER LEVEL GROUNDWATER MANAGEMENT GROUNDWATER PUMPING GROUNDWATER QUALITY GROUNDWATER RESOURCE GROUNDWATER RESOURCES GROUNDWATER TABLE HOUSEHOLDS INTERNATIONAL WATER IRRIGATION IRRIGATION WATER LAND SURFACE MARGINAL COST OF WATER NATURAL RAINFALL PRESSURE PUMPING EQUIPMENT PUMPS RECHARGE RECREATIONAL ACTIVITIES SALTWATER INTRUSION SEA SEA WATER SEA WATER INTRUSION STANDING WATER SUBSIDENCE SURFACE WATER SURFACE WATER SUPPLIES TRANSPIRATION USE OF IRRIGATION VALUE OF WATER WATER BASIN WATER DEMAND WATER EXTRACTION WATER FLOW WATER LOSS WATER MANAGEMENT WATER PRICES WATER REPLENISHMENT WATER RESOURCE WATER SERVICES WATER TABLES WATER UNIT WATER USE WATER WITHDRAWAL WATER WITHDRAWALS WELLS When a groundwater basin is exploited by a large number of farmers, acting independently, each farmer has little incentive to practice conservation that would primarily benefit other farmers. This can lead to excessive groundwater extraction. When farmers pay less than the full cost of electricity used for groundwater pumping, this problem can be worsened; while the problem can be somewhat relieved by rationing the electricity supply. The research in this paper constructs an analytical framework for describing the characteristics of economically efficient groundwater management plans, identifying how individual water use decisions by farmers collectively depart from efficient resource use, and examining how policies related to both water and electricity can improve on the efficiency of the status quo. It is shown that an optimal scheme for pricing electricity used for pumping groundwater includes two main elements: 1) the full (marginal) economic cost of electricity must be covered; and 2) there must be an extra charge, reflected in the electricity price, corresponding to the externality cost of groundwater pumping. The analysis includes a methodology for calculating the latter externality cost, based on just a few parameters, and a discussion of how electricity pricing could be modified to improve efficiency in both power and water use. 2012-03-19T18:43:14Z 2012-03-19T18:43:14Z 2010-12-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101206131004 http://hdl.handle.net/10986/3976 English Policy Research working paper ; no. WPS 5494 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
AGRICULTURAL PRODUCTION AGRICULTURAL WATER AGRICULTURAL WATER USE AQUIFER AQUIFERS BASINS CALIBRATION CONSERVATION DEEP WELLS DEMAND FOR WATER DISCHARGE ELECTRICITY ELECTRICITY CONSUMPTION FARMERS FLOW RATE FOSSIL WATER GROUND WATER GROUNDWATER GROUNDWATER BASINS GROUNDWATER EXTRACTION GROUNDWATER IRRIGATION GROUNDWATER LEVEL GROUNDWATER MANAGEMENT GROUNDWATER PUMPING GROUNDWATER QUALITY GROUNDWATER RESOURCE GROUNDWATER RESOURCES GROUNDWATER TABLE HOUSEHOLDS INTERNATIONAL WATER IRRIGATION IRRIGATION WATER LAND SURFACE MARGINAL COST OF WATER NATURAL RAINFALL PRESSURE PUMPING EQUIPMENT PUMPS RECHARGE RECREATIONAL ACTIVITIES SALTWATER INTRUSION SEA SEA WATER SEA WATER INTRUSION STANDING WATER SUBSIDENCE SURFACE WATER SURFACE WATER SUPPLIES TRANSPIRATION USE OF IRRIGATION VALUE OF WATER WATER BASIN WATER DEMAND WATER EXTRACTION WATER FLOW WATER LOSS WATER MANAGEMENT WATER PRICES WATER REPLENISHMENT WATER RESOURCE WATER SERVICES WATER TABLES WATER UNIT WATER USE WATER WITHDRAWAL WATER WITHDRAWALS WELLS |
| spellingShingle |
AGRICULTURAL PRODUCTION AGRICULTURAL WATER AGRICULTURAL WATER USE AQUIFER AQUIFERS BASINS CALIBRATION CONSERVATION DEEP WELLS DEMAND FOR WATER DISCHARGE ELECTRICITY ELECTRICITY CONSUMPTION FARMERS FLOW RATE FOSSIL WATER GROUND WATER GROUNDWATER GROUNDWATER BASINS GROUNDWATER EXTRACTION GROUNDWATER IRRIGATION GROUNDWATER LEVEL GROUNDWATER MANAGEMENT GROUNDWATER PUMPING GROUNDWATER QUALITY GROUNDWATER RESOURCE GROUNDWATER RESOURCES GROUNDWATER TABLE HOUSEHOLDS INTERNATIONAL WATER IRRIGATION IRRIGATION WATER LAND SURFACE MARGINAL COST OF WATER NATURAL RAINFALL PRESSURE PUMPING EQUIPMENT PUMPS RECHARGE RECREATIONAL ACTIVITIES SALTWATER INTRUSION SEA SEA WATER SEA WATER INTRUSION STANDING WATER SUBSIDENCE SURFACE WATER SURFACE WATER SUPPLIES TRANSPIRATION USE OF IRRIGATION VALUE OF WATER WATER BASIN WATER DEMAND WATER EXTRACTION WATER FLOW WATER LOSS WATER MANAGEMENT WATER PRICES WATER REPLENISHMENT WATER RESOURCE WATER SERVICES WATER TABLES WATER UNIT WATER USE WATER WITHDRAWAL WATER WITHDRAWALS WELLS Strand, Jon The Full Economic Cost of Groundwater Extraction |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5494 |
| description |
When a groundwater basin is exploited by
a large number of farmers, acting independently, each farmer
has little incentive to practice conservation that would
primarily benefit other farmers. This can lead to excessive
groundwater extraction. When farmers pay less than the full
cost of electricity used for groundwater pumping, this
problem can be worsened; while the problem can be somewhat
relieved by rationing the electricity supply. The research
in this paper constructs an analytical framework for
describing the characteristics of economically efficient
groundwater management plans, identifying how individual
water use decisions by farmers collectively depart from
efficient resource use, and examining how policies related
to both water and electricity can improve on the efficiency
of the status quo. It is shown that an optimal scheme for
pricing electricity used for pumping groundwater includes
two main elements: 1) the full (marginal) economic cost of
electricity must be covered; and 2) there must be an extra
charge, reflected in the electricity price, corresponding to
the externality cost of groundwater pumping. The analysis
includes a methodology for calculating the latter
externality cost, based on just a few parameters, and a
discussion of how electricity pricing could be modified to
improve efficiency in both power and water use. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Strand, Jon |
| author_facet |
Strand, Jon |
| author_sort |
Strand, Jon |
| title |
The Full Economic Cost of Groundwater Extraction |
| title_short |
The Full Economic Cost of Groundwater Extraction |
| title_full |
The Full Economic Cost of Groundwater Extraction |
| title_fullStr |
The Full Economic Cost of Groundwater Extraction |
| title_full_unstemmed |
The Full Economic Cost of Groundwater Extraction |
| title_sort |
full economic cost of groundwater extraction |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101206131004 http://hdl.handle.net/10986/3976 |
| _version_ |
1764389302684352512 |