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Water Policy and Institutions—A Basin Perspective

Water Policy and Institutions—A Basin Perspective. Claudia Ringler. Addis Ababa, May 28-29. Why?.

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Water Policy and Institutions—A Basin Perspective

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  1. Water Policy and Institutions—A Basin Perspective Claudia Ringler Addis Ababa, May 28-29

  2. Why? • Many economic decisions [HP/water supply infrastructure/blasting for navigation/sea-dykes] are taken at the river basin level or affect water, food and environmental outcomes in river basins need for sound economic analyses • Changes in basin institutions and economic incentives can increase water use efficiency, reduce investment needs, reduce adverse environmental outcomes [water marketing]

  3. Challenges for water policy analysis • Difficulty in handling stochastic nature of precipitation and runoff • Difficulty in handling transactions costs in different water allocation systems • Difficulty in accounting for political factors and multi-agent bargaining and decision making • Equity aspects of water allocation decisions • Data…data…data….[water use, price and income elasticities, env value, GW, WQ..]

  4. Challenges for water policy analysis • Fluidity of the resource across space and time with change values • Combination of three or more sources (SW/GW, precipitation) with different economic values • Limited direct tradability, difficult to establish a price for water • The compartmentalization in both thinking and treatment of water for different users • Economic value of improved water quality

  5. Key policies and institutions • Water rights • Water transfers • Water investments • Rules (priority in use) and regulations (f.ex. for environmental flows) • Water prices • Water brokerage systems / Water markets • Rotational systems • One basin decision-maker or multiple individual decision-makers

  6. Recent modeling advances • Agent based modeling systems (F.ex. Yellow River basin model) • Linkage of river basin models with CGE models (Indus basin model) • Linkage of river basin models with household data (already done with multi-market sector models, ongoing IWMI Nile basin model)  issue—representativeness of household data generally at the administrative level, not at the river basin level

  7. Recent modeling advances • Agent based modeling systems (F.ex. Yellow River basin model) • Linkage of river basin models with CGE models (Indus basin model) • Linkage of river basin models with household data (already done with multi-market sector models, ongoing IWMI Nile basin model)  issue—representativeness of household data generally at the administrative level, not at the river basin level

  8. Recent modeling advances • New advances in virtual water trade analysis • Integrated assessment models now increasingly incorporate water allocation models • Better interfaces to inform stakeholder dialogues

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