NDLI: Cooperative Management of Groundwater Resources in the Presence of Environmental Externalities

Content Provider	Springer Nature Link
Author	Esteban, Encarna Dinar, Ariel
Copyright Year	2012
Abstract	This paper investigates how cooperation among users can achieve a better management of groundwater in the presence of environmental externalities. Cooperation allows users to internalize the damages caused by their activities and reduce extractions. The paper develops a game theoretical framework to assess the value of cooperation in an aquifer that is divided into three sub-aquifers that are being overly exploited. Two types of externalities are modeled: first, water extractions in each sub-aquifer impact water levels in neighboring sub-aquifers (extraction externality). Second, the three sub-aquifers are also connected to an ecosystem and thus decisions in each sub-aquifer affect the health of the ecosystem (environmental externality). A cooperative game theory model is applied. The model empirically shows how the uncontrolled extractions in each sub-aquifer affects neighboring groundwater users but also cause severe impacts to the linked ecosystem. The model is tested empirically in one of the most important aquifers in Spain, the Eastern la Mancha aquifer. The results illustrate how both extraction and environmental externalities interact in affecting the likelihood of cooperation among the users. The paper estimates the value of cooperation and its stability with and without the environmental externality.
Starting Page	443
Ending Page	469
Page Count	27
File Format	PDF
ISSN	09246460
Journal	Environmental and Resource Economics
Volume Number	54
Issue Number	3
e-ISSN	15731502
Language	English
Publisher	Springer Netherlands
Publisher Date	2012-09-25
Publisher Place	Dordrecht
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Cooperation Non-cooperation Externalities Common-pool resources Groundwater management Ecosystem Game theory Shapley value Nash-Harsanyi solution Core Public choice Environmental Economics Environmental Law/Policy/Ecojustice Economic Policy Economics/Management Science Environmental Management
Content Type	Text
Resource Type	Article
Subject	Economics and Econometrics Management, Monitoring, Policy and Law

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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