TY - UNPB

T1 - Regulating groundwater use in developing countries

T2 - a feasible instrument for public intervention

AU - Hansen, Lars Gårn

AU - Jensen, Frank

AU - Amundsen, Eirik S

PY - 2011

Y1 - 2011

N2 - In many developing countries, groundwater is a common pool resource which is potentially subject to the tragedy of the commons if water extraction is not adequately regulated. However, in these countries, the regulatory infrastructure is often too weak to allow detailed monitoring of individual groundwater extraction. For this reason, classical public intervention instruments, such as consumption fees or tradable quotas, are infeasible. Here we present a theoretical foundation for a new public regulatory instrument that can potentially generate the same efficiency inducing incentives as fees and tradable quotas, but without their information and monitoring requirements. The instrument we propose is a tax based on aggregate extraction, rather than individual extraction measures.

AB - In many developing countries, groundwater is a common pool resource which is potentially subject to the tragedy of the commons if water extraction is not adequately regulated. However, in these countries, the regulatory infrastructure is often too weak to allow detailed monitoring of individual groundwater extraction. For this reason, classical public intervention instruments, such as consumption fees or tradable quotas, are infeasible. Here we present a theoretical foundation for a new public regulatory instrument that can potentially generate the same efficiency inducing incentives as fees and tradable quotas, but without their information and monitoring requirements. The instrument we propose is a tax based on aggregate extraction, rather than individual extraction measures.

M3 - Working paper

T3 - FOI Working Paper

BT - Regulating groundwater use in developing countries

PB - Institute of Food and Resource Economics, University of Copenhagen

ER -