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Rainwater Harvesting and Groundwater Conservation: When Endogenous Heterogeneity Matters

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  • Raphaël Soubeyran
  • Mabel Tidball
  • Agnes Tomini
  • Katrin Erdlenbruch

Abstract

In this paper, we focus on resource conservation in a model of decentralized management of groundwater and rainwater. We show that a conservation policy may have opposite effects on the level of the resource, depending on the outcome of the decentralized management. More precisely, we consider identical farmers who can use two water resources (groundwater and/or rainwater) and we study the symmetric and asymmetric feedback stationary Nash equilibria of the dynamic game. We show that a subsidy on the use of rainwater may increase the level of the aquifer at the symmetric equilibrium, whereas it decreases the level of the aquifer at the asymmetric equilibrium. This suggests that the usual focus on (interior) symmetric equilibria in dynamic games may provide misleading policy implications. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Raphaël Soubeyran & Mabel Tidball & Agnes Tomini & Katrin Erdlenbruch, 2015. "Rainwater Harvesting and Groundwater Conservation: When Endogenous Heterogeneity Matters," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(1), pages 19-34, September.
    • Handle: RePEc:kap:enreec:v:62:y:2015:i:1:p:19-34
    DOI: 10.1007/s10640-014-9813-9
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    1. Hubert Stahn & Agnès Tomini, 2015. "Rainwater Harvesting under Endogenous Capacity of Storage : a Solution to Aquifer Preservation," Annals of Economics and Statistics, GENES, issue 119-120, pages 209-234.
    2. Moreaux, Michel & Reynaud, Arnaud, 2006. "Urban freshwater needs and spatial cost externalities for coastal aquifers: A theoretical approach," Regional Science and Urban Economics, Elsevier, vol. 36(2), pages 163-186, March.
    3. Ostrom,Elinor, 2015. "Governing the Commons," Cambridge Books, Cambridge University Press, number 9781107569782.
    4. Masahiko Gemma & Yacov Tsur, 2007. "The Stabilization Value of Groundwater and Conjunctive Water Management under Uncertainty," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 540-548.
    5. Tsur, Yacov & Graham-Tomasi, Theodore, 1991. "The buffer value of groundwater with stochastic surface water supplies," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 201-224, November.
    6. Sittidaj Pongkijvorasin & James Roumasset, 2007. "Optimal Conjunctive Use of Surface and Groundwater with Recharge and Return Flows: Dynamic and Spatial Patterns ," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 531-539.
    7. Santiago Rubio & Begoña Casino, 2003. "Strategic Behavior and Efficiency in the Common Property Extraction of Groundwater," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 73-87, September.
    8. Catarina Roseta-Palma, 2003. "Joint Quantity/Quality Management of Groundwater," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 26(1), pages 89-106, September.
    9. Naomi Zeitouni & Ariel Dinar, 1997. "Mitigating negative water quality and quality externalities by joint mangement of adjacent aquifers," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(1), pages 1-20, January.
    10. Phoebe Koundouri, 2004. "Current Issues in the Economics of Groundwater Resource Management," Journal of Economic Surveys, Wiley Blackwell, vol. 18(5), pages 703-740, December.
    11. Rubio, Santiago J. & Casino, Begona, 2001. "Competitive versus efficient extraction of a common property resource: The groundwater case," Journal of Economic Dynamics and Control, Elsevier, vol. 25(8), pages 1117-1137, August.
    12. Darrell Krulce & James A. Roumasset & Tom Wilson, 1997. "Optimal Management of a Renewable and Replaceable Resource: The Case of Coastal Groundwater," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(4), pages 1218-1228.
    13. Roumasset, James A. & Wada, Christopher A., 2012. "Ordering the extraction of renewable resources: The case of multiple aquifers," Resource and Energy Economics, Elsevier, vol. 34(1), pages 112-128.
    14. Chakravorty, Ujjayant & Umetsu, Chieko, 2003. "Basinwide water management: a spatial model," Journal of Environmental Economics and Management, Elsevier, vol. 45(1), pages 1-23, January.
    15. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    16. Knapp Keith C. & Olson Lars J., 1995. "The Economics of Conjunctive Groundwater Management with Stochastic Surface Supplies," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 340-356, May.
    17. Hubert Stahn & Agnès Tomini, 2010. "A drop of rainwater against a drop of groundwater: does rainwater harvesting really allow us to spare Groundwater?," Working Papers halshs-00443667, HAL.
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    Cited by:

    1. Stahn, Hubert & Tomini, Agnès, 2017. "On conjunctive management of groundwater and rainwater," Resource and Energy Economics, Elsevier, vol. 49(C), pages 186-200.
    2. Galik, Christopher S. & McAdams, David, 2017. "Supply, Demand, and Uncertainty: Implications for Prelisting Conservation Policy," Ecological Economics, Elsevier, vol. 137(C), pages 91-98.

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    More about this item

    Keywords

    Differential game; Asymmetric equilibrium; Groundwater; Rainwater; Taxation; Q15; Q25; C72;
    All these keywords.

    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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