In most of countries, groundwater resource is a public good, and entitlement of use rights by the public authority to final users differs according to the country-specific legislative framework. In Italy, groundwater extraction has been regulated through non-tradable private licenses. At present the public authority needs to reform the current legislative framework, in order to comply with the Water Framework Directive, aiming at the enhancement of the efficiency of the resource use. This research analyzes the effects of reforming the current framework based on non-tradable use rights, by comparing two different liberalization scenarios: an intra-sector market, and a regional market. Although positive economic benefits are generally expected from the liberalization of use rights at aggregated level, we want to analyze whether some discriminant effects of the legislative framework change on some farmers group may arise. The empirical case study is referred to the Fortore river basin (South of Italy), where groundwater covers about 50-80% of the current needs, and informal (though illegal) water markets across neighbor farmers already exist. From the findings there is not any evidence that exchange liberalization of groundwater use rights leads to gains in terms of the value added and farmer’s revenue. In addition, in the case of an auction system regulated by the public authority, farmers whose water productivity is higher may be able to gain, while other may suffer some losses. In this case, resistances from farmers associations towards the legislative framework reform may arise.
Economic Effects of Legislative Framework Changes in Groundwater Use Rights for Irrigation
ZANNI, Giacomo
2011
Abstract
In most of countries, groundwater resource is a public good, and entitlement of use rights by the public authority to final users differs according to the country-specific legislative framework. In Italy, groundwater extraction has been regulated through non-tradable private licenses. At present the public authority needs to reform the current legislative framework, in order to comply with the Water Framework Directive, aiming at the enhancement of the efficiency of the resource use. This research analyzes the effects of reforming the current framework based on non-tradable use rights, by comparing two different liberalization scenarios: an intra-sector market, and a regional market. Although positive economic benefits are generally expected from the liberalization of use rights at aggregated level, we want to analyze whether some discriminant effects of the legislative framework change on some farmers group may arise. The empirical case study is referred to the Fortore river basin (South of Italy), where groundwater covers about 50-80% of the current needs, and informal (though illegal) water markets across neighbor farmers already exist. From the findings there is not any evidence that exchange liberalization of groundwater use rights leads to gains in terms of the value added and farmer’s revenue. In addition, in the case of an auction system regulated by the public authority, farmers whose water productivity is higher may be able to gain, while other may suffer some losses. In this case, resistances from farmers associations towards the legislative framework reform may arise.I documenti in SFERA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
