Agriculture Reference
In-Depth Information
and water storage costs. If, to all this, we add that expectations of new
supplies of cheap water are constantly being raised by the Public
Administration, then it should come as no surprise that the users show only
limited interest in transactions which suppose, at the very least, that they
have to pay the opportunity costs of the activity which assigns its rights
(see Sumpsi
et al.
1998). Nevertheless, we agree with Howe
et al
.(1986)
that it is necessary to demonstrate specific situations of Paretian
improvements derived from the exchange in order to convince both
policymakers and users of the advantages of these types of systems, as
compared to the traditional subsidised supply of new resources.
It is in this context where the time and space dimensions acquire a
particular relevance. The current administrative system establishes a series
of priorities that are independent of time and space. In this sense, new
demands by any user affect the whole system and the way in which water
is available for the remaining users can therefore be restricted, depending
on where and when the water is required. For example, the current plans
for the transfer of water from the Ebro to the Mediterranean basin have
been drawn-up with little account being taken of the effects on the time and
space distribution of the flows in the basin from which this water is to be
transferred. This could result in the disappearance of the Ebro delta, which
requires certain minimum stream flows at specific times.
The rest of the chapter is organised as follows. In Section 2, we
consider the model that underlies our specific case study. This model
includes the specification of the behaviour of two users and the formal
representation of the priority of water rights which results from applying
current legal regulations. Particular attention is paid to the geographical
and time characteristics of these rights. On the basis of a restricted
optimisation model, we show that it is possible to obtain an efficient
allocation that leads to greater joint profits. Section 3 is devoted to a
calibration and empirical application of the model through a simulation of
two scenarios: drought and extension of arable land. Section 4 closes the
chapter with a review of the main conclusions.
2. AGENTS, VARIABLES AND OPTIMISATION
FRAMEWORK
In this Section we propose a model on the basis of which it is possible to
obtain water allocations between users. Our aim is to construct this model
in such a way that it covers the largest possible number of situations.
However, before discussing the model in detail, let us first consider the
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