IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20140143.html
   My bibliography  Save this paper

Capacity Choice of Dams under Rivalry Use and Externalities

Author

Listed:
  • Harold Houba

    (VU University Amsterdam, the Netherlands)

  • Kim Hang Pham Do

    (Massey University, New Zealand)

  • Xueqin Zhu

    (Wageningen University, the Netherlands)

Abstract

This paper studies the relation between optimal dam capacity and water management under rivalry uses and externalities. We extend the hydropower generation model, based on Haddad (2011), by including the competing use of water resource, non-linear building cost of dam capacity and externalities in a welfare optimization model. We obtain the optimal dam capacity for multi-functional dams such as providing infrastructure for industrial and households water use, conjunctive use of hydropower generation and irrigation; storing water in the wet season for use in the dry season, and mitigating flooding damages. The optimal solution shows that optimal dam capacity is characterized by the marginal benefits of hydropower generation, the marginal costs of flooding damages, and the constraining factors. Moreover, the optimal water management can be achieved by using derived sea sonal prices in a decentralized manner.

Suggested Citation

  • Harold Houba & Kim Hang Pham Do & Xueqin Zhu, 2014. "Capacity Choice of Dams under Rivalry Use and Externalities," Tinbergen Institute Discussion Papers 14-143/II, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20140143
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/14143.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xueqin Zhu & Ekko Ierland, 2012. "Economic Modelling for Water Quantity and Quality Management: A Welfare Program Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(9), pages 2491-2511, July.
    2. Houba, Harold & Pham Do, Kim Hang & Zhu, Xueqin, 2013. "Saving a river: a joint management approach to the Mekong River Basin," Environment and Development Economics, Cambridge University Press, vol. 18(1), pages 93-109, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xie, Yang & Zilberman, David, 2015. "Water-Storage Capacities versus Water-Use Efficiency: Substitutes or Complements?," 2015 Conference, August 9-14, 2015, Milan, Italy 211894, International Association of Agricultural Economists.
    2. Kemeze, Francis H. & Miranda, Mario J. & Kuwornu, John & Amin-Somuah, Henry, 2016. "Optimal Management of Runoff Reservoir Supply: The Case of Tono Reservoir in Northern Ghana," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236030, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alberto Solís & Xueqin Zhu, 2015. "Water Markets: Insights from an Applied General Equilibrium Model for Extremadura, Spain," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 29(12), pages 4335-4356, September.
    2. Brian Blankespoor & Alan Basist & Ariel Dinar & Shlomi Dinar & Harold Houba & Neil Thomas, 2014. "Assessing the Economic and Political Impacts of Climate Change on International River Basins using Surface Wetness in the Zambezi and Mekong Basins," Tinbergen Institute Discussion Papers 14-005/II, Tinbergen Institute.
    3. Zhisong Chen & Huimin Wang & Xiangtong Qi, 2013. "Pricing and Water Resource Allocation Scheme for the South-to-North Water Diversion Project in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(5), pages 1457-1472, March.
    4. Erik Ansink & Harold Houba, 2014. "The Economics of Transboundary River Management," Tinbergen Institute Discussion Papers 14-132/VIII, Tinbergen Institute.
    5. Atalel Wubalem & Teshale Woldeamanuel & Zerihun Nigussie, 2023. "Economic Valuation of Lake Tana: A Recreational Use Value Estimation through the Travel Cost Method," Sustainability, MDPI, vol. 15(8), pages 1-20, April.
    6. E. Cabrera & M. Pardo & E. Cabrera & F. Arregui, 2013. "Tap Water Costs and Service Sustainability, a Close Relationship," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(1), pages 239-253, January.
    7. Liliana Hawrysz & Joachim Foltys, 2015. "Environmental Aspects of Social Responsibility of Public Sector Organizations," Sustainability, MDPI, vol. 8(1), pages 1-10, December.
    8. Nadine Wittmann, 2014. "A Microeconomic Perspective on Water Resources Management: Analyzing the Effects on Optimal Land Rents Along a River Basin," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 28(5), pages 1309-1325, March.
    9. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    10. Harold Houba & Kim Hang Pham Do & Xueqin Zhu, 2018. "Options of optimal dam capacity under externality and uncertainty," Discussion Papers 1807, School of Economics and Finance, Massey University, New Zealand.
    11. Zhang, Lei & Zhu, Xueqin & Heerink, Nico & Shi, Xiaoping, 2014. "Does output market development affect irrigation water institutions? Insights from a case study in northern China," Agricultural Water Management, Elsevier, vol. 131(C), pages 70-78.

    More about this item

    Keywords

    OR in environment and climate change; river-basin management; dam capacity; welfare optimization; externalities;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20140143. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.