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Staff Publications

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    'Staff publications' is the digital repository of Wageningen University & Research

    'Staff publications' contains references to publications authored by Wageningen University staff from 1976 onward.

    Publications authored by the staff of the Research Institutes are available from 1995 onwards.

    Full text documents are added when available. The database is updated daily and currently holds about 240,000 items, of which 72,000 in open access.

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Record number 490760
Title Water Markets: Insights from an Applied General Equilibrium Model for Extremadura, Spain
Author(s) Solis, A.F.; Zhu, X.
Source Water Resources Management 29 (2015)12. - ISSN 0920-4741 - p. 4335 - 4356.
DOI https://doi.org/10.1007/s11269-015-1063-2
Department(s) Environmental Economics and Natural Resources
WASS
Publication type Refereed Article in a scientific journal
Publication year 2015
Keyword(s) resource - benefits - quality - demand
Abstract In Extremadura, a southwest region of Spain, water has been traditionally been seen as an abundant resource, but growing irrigation demands under a low price of about 0.01 €/m3 are outstripping the supply of raw water and competing with its other consumptive and non-consumptive uses. To deal with the water scarcity in the region, a water market can be established to achieve the highest value of water use, which ma allocate irrigation water tot he most efficient users. Hence, a Social Accounting Matrix and Water accounts (SAMWA) for 2005 is used as a central core to calibrate an Appplied General Eauilibrium (AGE) model. This model is formulated in the Negishi format which, as a welfare program, can price raw water by its marginal value. The main purpose of this paper is to obtain insights into the potential economy-wide gains from establishing a water market such that this resource is allocated efficiently. The impact of a water market policy is investigated under three scenarios. First, we simulate a decrease in the availability of raw waer in Extremadura due to climate change. Second, an investment in a more efficient irrigation techjnology is considered. Finally, we extend our AGE model by including the amenity services of water and investiate how the willingness to pay f soncumers would affect the efficient water allocation. We thus offer policy makers insights into how reginal policies could be designed under different circumstances for a better management of raw water in Extremadura.
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