Drought and groundwater management
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Drought and groundwater management. / Amundsen, Eirik S; Jensen, Frank.
Frederiksberg : Department of Food and Resource Economics, University of Copenhagen, 2016.Research output: Working paper › Research
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TY - UNPB
T1 - Drought and groundwater management
AU - Amundsen, Eirik S
AU - Jensen, Frank
PY - 2016/6
Y1 - 2016/6
N2 - This paper considers the problem of a water management authority faced with the threat of a drought that hits at an uncertain date. Three management policies are investigated: i) a laissez-faire (open-access) policy of automatic adjustment through a zero marginal private net benefit condition, ii) a policy of optimal dynamic management ignoring the threat of the drought and relying on automatic adjustments through a zero marginal social net benefit condition, iii) an economically optimal dynamic policy taking account of the threat of a drought. In particular, we show that the optimal pre-drought steady-state equilibrium stock size of water under policy iii) is smaller than under policy ii) and, hence, a precautionary stock size should not be built up prior to the drought.
AB - This paper considers the problem of a water management authority faced with the threat of a drought that hits at an uncertain date. Three management policies are investigated: i) a laissez-faire (open-access) policy of automatic adjustment through a zero marginal private net benefit condition, ii) a policy of optimal dynamic management ignoring the threat of the drought and relying on automatic adjustments through a zero marginal social net benefit condition, iii) an economically optimal dynamic policy taking account of the threat of a drought. In particular, we show that the optimal pre-drought steady-state equilibrium stock size of water under policy iii) is smaller than under policy ii) and, hence, a precautionary stock size should not be built up prior to the drought.
M3 - Working paper
T3 - IFRO Working Paper
BT - Drought and groundwater management
PB - Department of Food and Resource Economics, University of Copenhagen
CY - Frederiksberg
ER -
ID: 163986522