The authors use original water user group (WUG) data from a reservoir irrigation system in China to examine the effect of water pricing policies on farmers’ water saving behaviors.
... See More + The introduction of volumetric water pricing at the group level, to replace area-based pricing, induces institutional change to prevent each member’s overuse of water when the volumetric price levels are moderate. Depending on the initial conditions, the multiple pathways of change lead to new institutional arrangements, with all of them contributing to water savings. However, when the price is set high enough, many farmers exit a WUG for private irrigation. This tendency is associated with an increased probability that the remaining members do not undertake institutional change and that they do not end up saving water. This may be due to the increased management difficulties among the remaining members whose fields are separated by former members who have now opted out for private irrigation across the WUG. As a result, authors do not find evidence that the reservoir water is saved at high volumetric price levels.
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The paper analyses different existing and possible future agricultural land investment scenarios in the ON and shows how a volumetric water pricing system lead to a relatively more efficient valuation of agricultural water.
... See More + A uniform pricing system is considered as it is the simplest volumetric pricing model and may be more adapted for the ON presently using a per are flat rate. A bio-economic model, combining biophysical and economic considerations, is developed to simulate the likely impacts of LSIALs under two alternative water pricing systems: the current flat rate per hectare pricing and a volumetric pricing. A comparative analysis of the effects of the different pricing systems is undertaken in terms of efficiency of water allocation, environmental flow requirements and cost recovery. The paper provides evidence on the merits of volumetric water pricing while addressing some of the possible political economy implications of adopting such a pricing system. The paper is organized as follows. Section two describes the methodological framework used. The subsequent section presents the results and discusses how volumetric water pricing can help to address water management problems in the ON. The final section concludes the paper drawing out the policy implications of adopting a volumetric water pricing system.
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The objective of the Third Rural Water Supply and Sanitation Project for Kyrgyz Republic is to improving water supply and sanitation services for the target rural communities, and building up capacities of institutions in the water supply and sanitation (‘WSS’) sector.
... See More + Some of the negative impacts and mitigation measures include: displaced persons as well as the residents of the host settlements should be provided with timely and relevant information, participate in consultations on resettlement options, and have opportunities to participate in planning, implementing, and monitoring of the resettlement activities. Appropriate and accessible mechanisms for administration and redress of grievances should be established for these groups; in new resettlement sites or in host communities, the necessary infrastructure and public services should be provided to improve, restore, or maintain accessibility and quality of service for the displaced persons and local residents. Alternative or similar resources to be provided to compensate the loss of access to common utility resources; the value of the labor invested in preparing agricultural land will be compensated at the average wage in the community for the same period of time. The rate used for land compensation should be updated to reflect values at the time compensation is paid; and fruit trees will be compensated to the owner by estimating the value of a seedling of a fruit tree considering the number of years needed to grow the tree to full maturity, and the cost of fruit crop produced by this tree within the indicated period.
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The development objective of the Water Security and Canal Protection Project for Kosovo is to contribute to restoring the canal original capacity as needed to secure bulk water for the various canal water users in Central Kosovo.
... See More + Some of the negative impacts and mitigation measures include: (1) compensation for lost of harvest and land improvements; (2) cash compensation for affected land equivalent to replacement value, including multiannual harvests; (3) providing accessibility to property or residential units. Temporary access will be provided during canal rehabilitation works; (4) cash compensation based on type, age, and productive value of affected trees; and (5) measures on restoration will be included in compensation agreements between contractors and affected people.
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This article examines the effect of water pricing policies on farmers’ water saving behaviors, using original water user group (WUG) data from a reservoir irrigation system in China.
... See More + The introduction of volumetric water pricing at the group level, to replace area-based pricing, induces institutional change to prevent each member’s overuse of water when the volumetric price levels are moderate. Depending on the initial conditions, the multiple pathways of change lead to new institutional arrangements, with all of them contributing to water savings. However, when the price is set high enough, many farmers exit a WUG for private irrigation. This tendency is associated with an increased probability that the remaining members do not undertake institutional change and that they do not end up saving water. This may be due to the increased management difficulties among the remaining members whose fields are separated by former members who have now opted out for private irrigation across the WUG. As a result, we do not find evidence that the reservoir water is saved at high volumetric price levels.
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Policy Research Working Paper WPS7369 JUL 15, 2015
Water policy is an important topic on the agenda of the international community, and efficiency and equity in the allocation of water have emerged as important factors to be considered.
... See More + Water pricing can be used to mitigate both the quantity and quality dimensions of water scarcity. This paper reviews partial equilibrium models and general equilibrium models that are relevant to irrigation water management issues. The most widely discussed issues in these models are water markets and water pricing. The interrelationships between economic, cultural, social, and political aspects that are related to water policy make it difficult to provide a comprehensive policy analysis. General equilibrium models of irrigation water management allow incorporation of both the irrigation sector and the other sectors in the economy and analysis of policies affecting each of them and the interaction between them. In addition to being able to address sector and household specifications, production factors, time horizon, pricing policies, and institutions such as water markets, general equilibrium models allow the analysis of the impact of water policies on equity and poverty alleviation. The authors conclude that, although there has been a significant increase in efforts to analyze water related problems, analytical and empirical research in the field is still deficient and more effort is needed to address them.
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Policy Research Working Paper WPS4556 MAR 01, 2008
This report is organized in five chapters. Chapter one Beijing's water resources status and management. Chapter two water pricing policy reform in Beijing.
... See More + Chapter three the analysis of behavior reaction to price policy of Beijing residents. Chapter four econometric analyses for the domestic water demand. Chapter five findings and policy recommendations.
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In regard to the effectiveness of public water policies and the financial support directed to the indigenous regions of Mexico, this study endeavors to elaborate a series of recommendations for decisionmakers.
... See More + The report contains 8 sections that address the following issues: 1) indigenous population issues in Mexico : concepts and basic information; 2) legal foundations regarding indigenous populations and water; 3) public institutions and policies on indigenous populations and water; 4) indigenous population participation and the participation of other social actors in public water policies; 5) the indigenous regions of study: pertinence and specificity with relation to the water; 6) water cultures, social management, and conflict in indigenous regions; 7) evaluation of the legislation, institutions and public policies with regard to water in indigenous regions; and 8) recommendations on the question of water in indigenous zones.
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This report offers four carefully analyzed case studies in various countries that together may offer a reasonable framework to learn from. Moreover, the case studies present important indicators and demonstrate the inherent potential that technology and institutions have to improve cost recovery implementation.
... See More + The first chapter -- cost recovery of irrigation and drainage projects: wishful thinking or difficult reality -- provides information collected in various agencies about the range of cost recovery collection strategies and introduces discussion that will take place. Chapter two -- canal automation and cost recovery -provides an overview of a canal automation system. The third chapter -- satellite measurements to assess and charge for groundwater abstraction -- focuses on a relatively new method that computes evapotranspiration (ET), net groundwater-use, and groundwater abstractions in irrigated areas using satellite-based measurements of land surface temperature and surface reflectance with a minimum of field data. The fourth chapter, -- cost recovery in the irrigation and drainage sector : user's participation as a mechanism for its promotion -- focuses on an approach that charges for irrigation and drainage in Egypt. Chapter five -- advancing irrigation cost recovery in the Republic of Yemen : a community cost-sharing approach -- presents an approach applied in Yemen, a water-scarce country. Chapter 6 -- what is common and what is specific in initiatives aiming to improve cost recovery : a synthesis of case studies -- integrates the set of experiences and analyzes the common issues and themes in technical and institutional approaches to improve cost recovery.
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Working Paper (Numbered Series) 38716 JAN 01, 2007
This report is a summary of the project of the Willingness-To-Pay (WTP) survey and study for water tariff Reform in Western Chongqing funded by Environment and Social Development Sector Unit (EASES) East Asia and Pacific Region, the World Bank.
... See More + The World Bank funded this study in order to understand the opinions of the public on present water services and the possibility of water price increase in Chongqing, and to quantify the willingness-to-pay for water service improvement of the affected population in the urban areas covered by the regional water transfer projects and other water development projects. This project was established initially in early 2006, and problem identification and questionnaire design started in March 2006. The questionnaires were designed based on the ones used in a World Bank project in India, and were revised to fit the objectives and background of this project and local situation. Pretest of questionnaire was commenced in June 2006, based on which the length, contents and appropriateness of the questions were evaluated and improved. The main revisions after the pretest were: (1) the scope of willingness to pay were enlarged to cover all of the possibilities from RMB Yuan 0.5 to RMB Yuan 15; (2) the ways of asking and the order of questions were changed and enriched, and the original one questionnaire for residential costumers was altered to 8 different questionnaires; and (3) the length of the questionnaires were limited so that it could be finished in 30 minutes. The full survey was conducted from July to August. Initially, the respondents were determined to be 2575 households and 50 industries/enterprises/institutions, however, as the air temperature of Chongqing was often higher than 40 centigrade degree during that period, the implementation of survey was seriously affected, the progress was postponed, and the sampling decision was affected as well. As a result, 2308 households accepted the interview survey and 1942 questionnaires were valid. Strict quality control measures were adopted throughout the implementation of on-site interview survey.
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Most of the large rivers of the world cross national borders, often resulting in water use conflicts and tensions, as well as missed opportunities for sustainable development, peace, and security.
... See More + About one-half of our planet's land area and population, and more than 60 percent of global freshwater flow, are located in trans-boundary basins. GEF projects help nations in trans-boundary basins or those sharing a marine ecosystem work together to establish priorities; adopt policy, legal, and institutional reforms in sectors causing degradation or use conflicts; and test the feasibility of various investments to address use conflicts and reverse degradation. This paper discusses the following issues: country-driven assistance, shared drainage basins, restoring floodplains for poverty reduction, establishing priorities and developing a shared commitment, preventing conflicts, reforming policy and institutions, attracting diverse financing, promoting stakeholder participation, sharing experience, and lessons learned.
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No silver bullet exists to improve cost recovery or water use efficiency of irrigation systems. However, many countries provide examples of successful reforms that policymakers and system managers can draw upon for inspiration and ideas.
... See More + A successful system will have the appropriate mix of technology, management, policy, and institutional arrangements that facilitate transparent and efficient service delivery and increase farmer's willingness to pay and to use limited water resources more efficiently. This note is based on the larger volume of the same name, which outlines guidelines for designing a successful system for cost recovery and efficient water use and provides numerous case studies of successful implementation.
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The objective of this paper is to develop guidelines for improving cost recovery and reducing water use per unit of output. The guidelines were developed from a review of studies of irrigation reforms and interviews of 20 World Bank staff members with responsibility for irrigation sector reforms in countries from Asia to Latin America (names listed in Appendix 1).
... See More + From these studies and interviews, we distilled specific reforms that are important in improving cost recovery or reducing water use, or both. Reforms needed by individual countries or projects will depend on their institutional arrangements as well as the type of irrigation and its physical condition. The second section of the paper begins by listing some reasons for low collections and provides an overview of some of the reforms that have raised collection rates. In the next section, the authors review cost-recovery principles and provide some examples of what different countries have done to recover project costs and collect water charges from users. The focus in the fourth section is on designing water charges or water markets that will give farmers an incentive to make better use of their water by reducing the amount of water used per unit of output. In the fifth section, case studies are used to determine what reforms can help improve cost recovery and increase collection rates. In addition, water pricing reforms are identified that will encourage farmers to reduce their water use per unit of output. The final section provides a summary of the reforms that are important for increasing cost recovery and encouraging farmers to improve their use of water.
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Working Paper (Numbered Series) 37063 JAN 01, 2005
Many cities in South Asia are currently considering policy initiatives designed to improve the delivery of municipal water and sanitation services.
... See More + An important part of these policy discussion is the reform of current water pricing practices and tariff structures, including the use of tariffs to deliver subsidies. This paper discusses the objectives of water tariffs, describes the main types of tariff structures in use around the world and their pros and cons, and examines the use of pricing structures to deliver subsidies. The paper concludes that it is difficult and challenging to design tariff structures which are consistent with the many conflicting objectives of the water sector (such as economic sustainability, efficiency, equity and affordability), and that in many cases existing practices introduce distortions and undesirable effects, particularly for poor users. A water tariff is an important management tool. The pricing of water services is, however, controversial, and it is important for reformers to understand why there is so little consensus on water pricing issues.
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Working Paper (Numbered Series) 26538 DEC 01, 2002
As water scarcity and population pressures increase, more countries are adopting water pricing mechanisms, as their primary means of regulating the consumption of irrigation water.
... See More + The way to allocate water efficiently is to "get the prices right", but how to accomplish this is open to debate. Water pricing methods are sensitive to the social, physical, institutional, and political setting. To assess the costs and benefits of a particular irrigation project, the pricing method must be tailored to local circumstances. The author's survey of the resource economics literature on irrigation services and pricing, will be useful for developing comprehensive guidelines for water policy practitioners. He synthesizes accumulated knowledge about the implementation, and performance of various water pricing methods used over the past two decades: volumetric pricing (marginal cost pricing), output and input pricing, per area pricing, tiered pricing, two part tariffs, and water markets. As water scarcity and population pressures increase, more countries are adopting water pricing mechanisms as their primary means of regulating the consumption of irrigation water. The way to allocate water efficiently is to "get the prices right", but how to accomplish this is open to debate. Water pricing methods are sensitive to the social, physical, institutional, and political setting. To assess the costs and benefits of a particular irrigation project, the pricing method must be tailored to local circumstances. The author's survey of the resource economics literature on irrigation services and pricing, will be useful for developing comprehensive guidelines for water policy practitioners. He synthesizes accumulated knowledge about the implementation, and performance of various water pricing methods used over the past two decades: volumetric pricing (marginal cost pricing), output and input pricing, per area pricing, tiered pricing, two part tariffs, and water markets.
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Policy Research Working Paper WPS2449 SEP 30, 2000
This book comprises two parts that attempt to explain the political economy of water pricing reforms. The three sections of part 1 provide the theoretical and empirical foundation to the approach of this book.
... See More + Section A of part 1 provides a theoretical framework that emphasizes the link between property regimes and pricing regimes, address the power and influence between and within water resource management organizations, and demonstrate the importance of asymmetric information for the implementation of efficient pricing reform. Section B of part 1 demonstrates the applications of various political economy concepts in the evaluation of water pricing reforms. Main issues include the need to design the reform to account for the existing institutional and political setup, and the advantage of either having a broad agenda for the reform or combining two reforms that address similar issues of economic efficiency. Section C of part 1 addresses various political economy issues of urban water pricing reforms. This section also addresses the equity and social preferences of various segments of society affected by the tariff structure. Part 2 is a collection of five country case studies that individually and collectively attempt to support the framework and empirical evidence in part 1.
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