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Abstract
In this paper we analyse the economic impact of alternative water management instruments
that allow addressing the problem of non-renewable groundwater pumping in the aquifers of the
Guadalentín Valley (southeast Spain). Their impact is assessed using a partial equilibrium mathematical
programming model that maximises the farm net margin resulting from the use of the available water
resources for irrigation in the area. Our results show that the buyback of groundwater pumping rights is
the option with the greatest public budgetary cost and economic impact. On the contrary, the combination
of an environmental tax on groundwater pumping and the substitution of groundwater by subsidised desalinised
water allow eliminating aquifer overdraft in the area while minimising the public budgetary cost
and the economic impact on the agricultural sector.