Feasibility Study of Water Market Design with Conditional Evaluation Approach (Case Study: Hashtgerd Plain, Alborz Province)

Document Type : Research Paper

Authors

1 Department of Economics, Propagation and Agricultural Education, Science and Research Branch, Islamic Azad University, Tehran, Iran

2 Department of Agricultural Economics, College of Agriculture and Natural Resources, University of Tehran, Karaj, Iran

3 Department of Economics, Propagation and Agricultural Education, Science and Research Branch, Islamic Azad University, Tehran, Iran.

Abstract

Hashtgerd plain has 56percent of Area of Alborz province and consumes more than 84% of surface water resources and more than 90% of groundwater. It is recognized as one of the most significant agricultural zones that experiences critical crises such as subsidence because of excessive withdrawal of these resources. Consequently, it will be inevitable to manage water resources optimally that establishing the water market as an economic instrument will play a significant role in allocating water resources optimally. The economic value of water input and its demand function was estimated in these areas. The equilibrium price of water input in plain was calculated and compared with the results achieved by valuation calculations using the results of estimating the demand functions and the amount of water supply in this study to examine the probability of developing a water market in Hashtgerd using the positive mathematical planning method and SWAP approach and also the optimal cultivation pattern of the region was estimated, which includes 3divisions.As the result, if there is the required physical infrastructure and the related laws, it will be possible to create a water market among regions in conditions that Nazarabad is the purchaser and Taleghan and Savojbolagh are the sellers of their surplus water resources. The results of examining the possibility of forming an intra-regional water market also show that considering that the enthusiasm to pay in people who have limited resources is more than the obtained equilibrium price and the willingness to receive is lower in people who sell their surplus water resources than the equilibrium price; it will be possible to form a water market among farmers in each city with an equilibrium price equal to 3394 Rials per cubic meter. In this situation, both customers (due to purchasing water cheaper than enthusiasm to pay) and sellers (selling water more expensive than enthusiasm/willing to receive) will benefit from creating the market. However, due to the higher equilibrium price of the economic value of water in the cities of Taleghan and Savojbolagh, there is a possibility of failure of the water market and the transfer of water to other sectors.

Keywords

References

Asaadi, M., Vakilpoor, M., Mortazavi, S., & Nemati Faraj, T. (2019). Estimating the Economic Value of Water Using Willingness to Pay of Potato Farmers and the Value of Marginal Product. Iranian Journal of Soil and Water Research, 50(4), 1023-1037. (In Farsi)
Bohlolvand, A., Sadr, S., & Hashemi, A. (2014). The role of agricultural water markets in the allocation and pricing of water resources (Case study: Mojen Water market). Iranian Journal of Agricultural Economics and Development Research, 45(4), 761-773. (In Farsi)
Desai, B. H. (2015). 14. United Nations Environment Program (UNEP). Yearbook of International Environmental Law, 26, 609-616.
Dinar, A., Rosegrant, M. W., & Meinzen-Dick, R. S. (1997). Water allocation mechanisms: principles and examples (No. 1779). World Bank Publications.
Farajzadeh Z., Soltani, G., & Roustaei, M. (2010). Estimating the enthusiasm to pay in visitors of the Pasargad historical complex and analyzing the factors affecting it: Application of conditional valuation method. Quarterly Journal of Economic Research, 9(4), 89-111. (In Farsi)
Grafton, R. Q., & Peterson, D. (2007). Water trading and pricing. 2007) Managing Water for Australia, Collingwood, Australia: CSIRO Publishing, 73-84.
Haris, G. D. (2003). Agricultural processor procurement and hedging strategies. MS.c. thesis, North Dakota State, University of Agricultural and Applied Science.
Howitt, R. E., Medellín-Azuara, J., MacEwan, D., & Lund, J. R. (2012). Calibrating disaggregate economic models of agricultural production and water management. Environmental Modelling & Software, 38, 244-258.
Iran Water Resources Management Company (IWRMC). (2020). Investigation of annual water resources and consumption of Alborz province in the water year 2019-2020. Office of Basic Studies of Water Resources, Tehran, Iran, 37 pp.
Kemper, K. E., & Simpson, L. D. (1999). The water market in the Northern Colorado water conservancy district-institutional implications. Institutional Frameworks in Successful Water Markets: Brazil, Spain and Colorado, USA, World Bank Technical Paper, (427), 21-43.
Kemper, K., Gonçalves, J. Y. B., & Bezerra, F. W. B. (1999). Water allocation and trading in the Cariri region–Ceará, Brazil. World Bank technical paper, (427).
Kiani, G. (2008). The role of the market in allocating water resources, a case study of Mojen water market. Dissertation for the doctoral degree, University of Tehran. (In Farsi)
Kiani, G. (2016). The Role of Market in Optimal Water Resources Allocation and Efficacious Factors Influencing the Efficiency of Water Markets. Journal of Water and Sustainable Development, 3(1), 93-102. (In Farsi)
Kiani, G., & Bagheri, A. (2012). Examining local water markets in Ardabil. Ardabil's Regional Water Company. Unpublished report. (In Farsi)
Kiani, G., & Bagheri, A. (2016). Examining the economic consequences of local water markets (Case study of Ardabil city). Journal of Iran's Water Research, 10(1), 163-169. (In Farsi)
Kolstad, C. D. (2010). Environmental Economics: Oxford University Press: New York. ISBN: 9780199732647
Lazarova, V., Levine, B., Sack, J., Cirelli, G., Jeffrey, P., Muntau, H., ... & Brissaud, F. (2001). Role of water reuse for enhancing integrated water management in Europe and Mediterranean countries. Water Science and Technology, 43(10), 25-33.
Liston-Heyes, C., & Pilkington, A. (2004). Inventive concentration in the production of green technology: A comparative analysis of fuel cell patents. Science and Public Policy, 31(1), 15-25.
Nazari, M. (2016). Water Market in Theory and Practice: Market Failure and Public Policy. Journal of Water and Sustainable Development, 3(1), 103-114. (In Farsi)
Tarrech, R., Marino, M., & Zwicker, G. (1999). The siurana–Riudecanyes irrigation subscribers association and water market system. World Bank technical Paper, No. 427
Iranian Journal of Soil and Water Research
Volume 53, Issue 1
April 2022
Pages 159-169

Files

Share

How to cite

Statistics