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Chapter 7 - Case Studies of Regulatory Interventions

Published online by Cambridge University Press:  21 April 2021

Ariel Dinar  and
Yacov Tsur
Ariel Dinar
Affiliation:
University of California, Riverside
Yacov Tsur
Affiliation:
Hebrew University of Jerusalem
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Summary

The chapter presents case studies from Mexico and Spain of policy interventions that regulate groundwater extraction and use. The cases involve pricing, quotas, and removal of subsidies aimed at reducing negative externalities associated with groundwater over-pumping. The examples demonstrate the use of different policy instruments and their effects on the behavior of groundwater users in addressing negative externalities. The example from Mexico shows how a subsidy of electricity for pumping groundwater leads to perverse effects resulting in depletion of the aquifer. The example from Spain shows the negative effects of unregulated groundwater extracted for irrigation purposes on groundwater-dependent wetlands that contribute to ecosystem services.

Keywords

SpainMexicoelectricitygroundwater dependent ecosystemswater pricingpumping quotaselectricity subsidy
Type
Chapter
Information
The Economics of Water Resources
A Comprehensive Approach
 , pp. 133 - 164
Publisher: Cambridge University Press
Print publication year: 2021

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References

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Tellez-Foster, E., Rapoport, A., and Dinar, A., 2017. Groundwater and Electricity Consumption under Alternative Subsidies: Evidence from Laboratory Experiments. Journal of Behavioral and Experimental Economics, 68, 41–52.Google Scholar
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