New directions in water resources management: The role of water pricing policies

Abstract

Water resources will face increasing competition and higher environmental concerns during this century. To meet these challenges, the new Water Framework Directive has drawn up an integrated framework and established the basic principles for a sustainable water policy in the European Union. The introduction of water prices reflecting the true cost of irrigation is one of its most innovative components. In this paper, a positive mathematical programming model is developed to assess the environmental and socio-economic impacts of water pricing policies in Spanish irrigated lands. The model interface allows friendly use and easy replication in a large number of irrigation districts, selected throughout the Spanish territory. The model results show the impact on environmental indicators, water consumption, cropping patterns, technology adoption, labor, farmers' income, and the water agency revenues when different scenarios of cost recovery are considered. It is argued that this modeling approach may be used as a management tool to assist in the implementation of the cost recovery approach of the new Water Framework Directive.