The design and implementation of water policies to address scarcity problems are largely shaped by the behavior of interest groups and their ability to influence policymakers. Different and opposed interests of stakeholders regarding policies trigger water conflicts and, frequently, lead to the failure of the implemented regulation. Departing from political economy theory, we empirically estimate the determinants that affect the level of lobbying effort and effectiveness by water interest groups for influencing water policy. The findings are based on data collected by a survey administered among different irrigators' groups, in a water-stressed river basin (the Jucar River Basin in Spain) that vie to increase their water allocations. Our results demonstrate how lobbying effort depends on the involvement of the interest groups, the energies exerted to sway water authorities, and on the variation among the group members. Lobbying effectiveness is a function of the effort exerted. Furthermore, both functions depend on the intrinsic characteristics of the group's members. While the empirical results corroborate several main statements of the theory of lobbying and interest groups, some deviations based on the empirical application remain.

Climate change impacts and the growing concern on environmental water demand are further increasing competition for scarce water resources in many arid and semiarid regions worldwide. Under these circumstances, new water allocation mechanisms based on the involvement of stakeholders are needed, for an efficient and fair allocation of water and income among users. This paper develops a cooperative game theory framework in order to analyze water management policies that could address scarcity and drought in a typical arid and semiarid basin in Southeastern Spain. The results provide clear evidence that achieving cooperation reduces drought damage costs. However, cooperation may have to be regulated by public agencies, such as a basin authority, when scarcity is very high, in order to protect ecosystems and maintain economic benefits. The cooperative game theory solutions and stability indexes examined in this paper demonstrate the importance of incorporating the strategic behavior of water stakeholders in the design of acceptable and stable basin-wide drought mitigation policies.

Growing water extractions combined with emerging demands for environment protection increase competition for scarce water resources worldwide, especially in arid and semiarid regions. In those regions, climate change is projected to exacerbate water scarcity and increase the recurrence and intensity of droughts. These circumstances call for methodologies that can support the design of sustainable water management. This paper presents a hydro-economic model that links a reduced form hydrological component, with economic and environmental components. The model is applied to an arid and semiarid basin in Southeastern Spain to analyze the effects of droughts and to assess alternative adaptation policies. Results indicate that drought events have large impacts on social welfare, with the main adjustments sustained by irrigation and the environment. The water market policy seems to be a suitable option to overcome the negative economic effects of droughts, although the environmental effects may weaken its advantages for society. The environmental water market policy, where water is acquired for the environment, is an appealing policy to reap the private benefits of markets while protecting ecosystems. The current water management approach in Spain, based on stakeholders' cooperation, achieves almost the same economic outcomes and better environmental outcomes compared to a pure water market. These findings call for a reconsideration of the current management in arid and semiarid basins around the world. The paper illustrates the potential of hydro-economic modeling for integrating the multiple dimensions of water resources, becoming a valuable tool in the advancement of sustainable water management policies.

The increasing concern about the degradation of water-dependent ecosystems calls for considering ecosystems benefits in water management decision-making. Sustainable water management requires adequate economic and biophysical information on water systems supporting both human activities and natural ecosystems. This information is essential for assessing the impact on social welfare of water allocation options. This paper evaluates various alternative water management policies by including the spatial and sectoral interrelationships between the economic and environmental uses of water. A hydroeconomic model is developed to analyze water management policies for adaptation to reduced water availability in the Ebro Basin of Spain. The originality in our contribution is the integration of environmental benefits across the basin, by using endemic biophysical information that relates stream flows and ecosystem status in the Ebro Basin. The results show the enhancement of social welfare that can be achieved by protecting environmental flows, and the tradeoffs between economic and environmental benefits under alternative adaptation strategies. The introduction of water markets is a policy that maximizes the private benefits of economic activities, but disregards environmental benefits. The results show that the current institutional policy where stakeholders cooperate inside the water authority, provides lower private benefits but higher environmental benefits compared to those obtained under water markets, especially under severe droughts. However, the water authority is not allocating enough environmental flows to optimize social welfare. This study informs strategies for protection of environmental flows in the Ebro Basin, which is a compelling decision under the imminent climate change impacts on water availability in coming decades.

Water scarcity is a critical environmental issue worldwide, especially in arid and semiarid regions. In those regions, climate change projections suggest further reductions in freshwater supplies and increases of the recurrence, longevity and intensity of drought events. At present, one important question for policy debate is the identification of water policies that could address the mounting water scarcity problems. Suitable policies should improve economic efficiency, achieve environmental sustainability, and meet equity needs. This paper develops and applies an integrated hydro-economic model that links hydrological, economic and environmental elements to such issues. The model is used to conduct a direct comparison of water markets, water pricing and institutional cooperation, based on their economic, environmental and equity outcomes. The analysis is performed in the Jucar Basin of Spain, which is a good natural experiment for studying water scarcity and climate change policies. Results indicate that both institutional and water market policies are high performing instruments to limit the economic damage costs of droughts, achieving almost the same social benefits. However, the environmental effects of water markets are worrying. Another important finding is that water pricing is a poor policy option not only in terms of private and environmental benefits but also in terms of equity.

Water policies have been implemented worldwide to face water stress. However, the existence of water users’ groups with opposite interests and different political power results in the plain failure or low effectiveness of water policy reforms. A better understanding of users’ perceptions regarding policy outcomes is important to avoid the failure of water policies and the intensification of water conflicts. This paper empirically examines the divergent perception of interest groups on the implementation of different policies dealing with water scarcity and their proactive involvement with water agencies. We have conducted a survey in the Jucar River Basin (a water-stressed basin in southeastern Spain) to analyze interest group opinions regarding water policy effectiveness and water institutions’ performance in water management. Questionnaires were sent to the main irrigation districts and urban water utilities within the basin. The collected information gives a general picture of the behavior of opposite water interest groups in this basin. The analysis of the perceptions on water policy reform between the groups highlights the existence of significant differences between preferred measures to address water scarcity and lobbying capacity. These differences depend on the size of the group, the specific basin location, and other group characteristics.

Depletion of groundwater aquifers along with all of the associated quality and quantity problems which affect profitability of direct agricultural and urban users and linked groundwater-ecosystems have been recognized globally. During recent years, attention has been devoted to land subsidence-the loss of land elevation that occurs in areas with certain geological characteristics associated with aquifer exploitation. Despite the large socioeconomic impacts of land subsidence most of these effects are still not well analyzed and not properly recognized and quantified globally. In this paper we developed a land subsidence impact extent (LSIE) index that is based on 10 land subsidence attributes, and applied it to 113 sites located around the world with reported land subsidence effects. We used statistical means to map physical, human, and policy variables to the regions affected by land subsidence and quantified their impact on the index. Our main findings suggest that LSIE increases between 0.1 and 6.5% by changes in natural processes, regulatory policy interventions, and groundwater usage, while holding all other variables unchanged. Effectiveness of regulatory policy interventions varies depending on the lithology of the aquifer system, in particular its stiffness. Our findings suggest also that developing countries are more prone to land subsidence due to lower performance of their existing water governance and institutions.