Estimating Efficient Water Prices in the Sao Marcos River Basin: A Residual Imputation Approach
Publication: Journal of Water Resources Planning and Management
Volume 148, Issue 5
Abstract
The conflicting demands for water used for irrigating crops, generating power, and supplying humans and livestock have placed many river basins around the world under stress. The competition for scarce water resources will be exacerbated by the impact of climate change. This article uses a residual imputation and net rents approach to obtain economic values and water demand curves of irrigators in Brazil’s Sao Marcos River Basin (SMRB). We estimate that current water prices must increase by over 230 times in the dry season to reduce the water consumption in the basin to the level that is required to accommodate its use to generate electricity as required by the water regulator. These estimated water prices are constrained efficient in the sense that they promote the efficient reduction in water consumption from the agricultural sector to satisfy the existing water permit granted for electricity generation.
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Data Availability Statement
All data, models, and code generated or used during the study appear in the published article.
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Journal of Water Resources Planning and Management
Volume 148 • Issue 5 • May 2022
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© 2022 American Society of Civil Engineers.
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Received: Jul 20, 2020
Accepted: Dec 10, 2021
Published online: Feb 21, 2022
Published in print: May 1, 2022
Discussion open until: Jul 21, 2022
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