Tradable water saving certificates to improve urban water use efficiency: an ex‐ante evaluation in a French case study

This paper proposes a system of tradable Water Saving Certificates to improve the efficiency of water allocation between Drinking Water Utilities at river basin level. A market institutional set‐up, inspired from recent policy developments in the energy sector, is proposed. An original analytical pr...

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Bibliographic Details
Published in:The Australian journal of agricultural and resource economics 2016-07, Vol.60 (3), p.422-441
Main Authors: Rinaudo, Jean‐Daniel, Calatrava, Javier, De Byans, Marine Vernier
Format: Article
Language:English
Subjects:
Case studies
Earth Sciences
Economic theory
Efficiency
Environmental economics
Hydrology
Mathematical programming
Sciences of the Universe
Studies
tradable water saving certificates
Urban areas
Water conservation
water management and policy
water market
Water markets
Water resources management
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Summary:This paper proposes a system of tradable Water Saving Certificates to improve the efficiency of water allocation between Drinking Water Utilities at river basin level. A market institutional set‐up, inspired from recent policy developments in the energy sector, is proposed. An original analytical price‐endogenous model is developed to simulate trade intensity, equilibrium price and efficiency gains in this urban water market. The economic model is implemented in a French case study using mathematical programming. It is used for conducting an ex‐ante evaluation of trade possibilities and efficiency gains, considering different spatial restrictions aimed at controlling environmental externalities. Our modelling exercise provides evidence of the benefits of the proposed Water Saving Certificate scheme.
ISSN:1364-985X
1467-8489
DOI:10.1111/1467-8489.12132