Options Méditerranéennes, A n ° 88, 2009- Technological Perspectives for Rational Use of Water Resources in the Mediterranean Region Comparative analysis of water saving policies in agriculture: pricing versus quotas

Abstract. The ‘Water Framework Directive ’ 2006/60/EC (WFD) recognizes the fact that water management should include an economic analysis of alternatives. In the present paper we propose a methodology based on comparative analysis to carry out an in-depth assessment of the socio-economic impact of two alternative water policies aimed at resource saving: i) water pricing policies (at basin and regional level) and ii) quotas (reduction in the abstraction of daily use). For this purpose, we implement a linear programming model at the territorial level to simulate the effects in terms of water saving and socio-economic impact. This is complemented by an aggregated analysis based upon crop water production and response functions. We analyze the implications of various water policies for the irrigation of one of the most important basins in Spain: the Guadalquivir Valley in Andalusia. The results indicate that application of quotas is more suitable than water pricing policies to achieve a reduction in water use and bring about economic sustainability