Groundwater management for agriculture and nature: an economic analysis

Research output: Thesisinternal PhD, WU

Abstract

<em><p>Key words:</em> desiccation of nature, economics of water management, groundwater extraction, groundwater level management, ecohydrology, agriculture, policy instruments.</p><p>As a result of declining groundwater levels, nature in the Netherlands is suffering from desiccation. Since measures taken to raise groundwater levels in order to restore nature often lead to unintended wet damage to crops in adjacent farmland, an economic analysis to determine optimal solutions is required. The fundamental factors involved in such an analysis are presented in this thesis. The main objectives are: (1) to gain an economic insight into conflicting interests between agriculture and nature with respect to the desiccation of nature; (2) to develop methods and models to analyse groundwater level management; (3) to study agricultural groundwater extraction; and (4) to provide an insight into the suitability of policy instruments for both groundwater level and groundwater extraction management. <em></p></em><p>Cost-benefit analysis has been applied to study optimal uniform groundwater level management in agricultural areas with special ecological value. Cost-effectiveness analysis has been used to study changes in non-uniform groundwater levels in nature reserves and adjacent agricultural areas. Optimal control theory has been used to study the dynamics of agricultural groundwater extraction management. <em></em> The novelty of this study is the integrated economic and ecohydrological approach to the desiccation problem and the development of a method to compare various objective functions of nature restoration.</p><p>The study shows that the failure of markets, institutions and policies has resulted in the desiccation of nature in the Netherlands. Markets fail due to the public nature of groundwater services and to the externalities of groundwater extraction. There is institutional failure since it is not clear who owns rights to lower groundwater levels and to extract groundwater. Besides, water boards make decisions about surface water levels, which directly affect groundwater levels, although they are not responsible for groundwater level management. Policy reform is, however, usually conditional upon the size of efficiency gains relative to transaction costs. The study shows that the current policy goal to reduce the desiccated surface area will not maximise the increase in the ecological value. Since the marginal costs to agriculture per conservation value unit restored increase, the partial restoration of many reserves rather than the full restoration of a few reserves could be considered. The study also shows that the annual costs of damage to agriculture due to restoration are small compared to the annual costs of investments in hydrological measures.</p>
Original languageEnglish
QualificationDoctor of Philosophy
Awarding Institution
  • Wageningen University
Supervisors/Advisors
  • van Ierland, Ekko, Promotor
  • Feddes, R.A., Promotor, External person
  • Witte, J.P.M., Promotor
Award date9 Nov 2001
Place of PublicationS.l.
Print ISBNs9789058085276
Publication statusPublished - 2001

Keywords

  • water table
  • water management
  • agriculture
  • nature conservation
  • water use
  • economic analysis
  • water level

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