Economic valuation of water

Document Type : Review Paper

Authors

1 Department of Water, Wastewater and Environmental Engineering, Faculty of Civil, Water and Environmental Engineering, Shahid Beheshti University, Tehran, Iran.

2 Department of Water, Wastewater and Environmental Engineering, Faculty of Civil Engineering, Water and Environment, Shahid Beheshti University, Tehran,

Abstract

Economic valuation of water has an important and decisive role in the efficient allocation of water resources, appropriate policies and effective decision-making. The literature of the country contains a large number of articles and significant efforts in the field of economic valuation of water. The extent and diversity of Published studies requires that a general overview of the economic valuation of water in the country be provided by reviewing these studies. In this article, by extracting, categorizing and analyzing the existing studies on water valuation in different sectors of the economy, we try to reach a general conclusion about the policies proposed and common methods in these studies. In addition, this paper attempts to identify study gaps by critique of the methods used and, finally, offers suggestions for future research in the field of water economic valuation. According to the summary, increasing the price of water in all uses, including industrial, urban and agricultural uses, is recommended. The conditions for water value-based pricing are available for industrial and urban use, and in the agricultural sector requires government support and technology development. The economic value of water-related ecosystem services is among the highest levels of economic value in water uses. Therefore, it is recommended that conservation of natural flow in aquatic ecosystems be a priority for resource allocation.

Keywords

Main Subjects


  1. Abunouri, A., Mohammadi, H., & Norouzinejad, M. (2011). Estimating the economic value of water in the agricultural sector by Hednik method (case study of Sabzevar city). Agricultural Economics, 5 (2), 21-57. (In Persian).
  2. Ahmadi, A., Zolfagharipoor, M. A., & Ebrahimi, B. (2019). Challenges and considerations of regional water market rights, a case study: Isfahan-Borkhar Plain. Iran-Water Resources Research, 14(5), 146-159. (In Persian).
  3. Ahmadi, A., Zolfagharipoor, M. A., Nikouei, A. R., & Dorreali, M. Y. (2016). Economic assessment of technical infrastructure implementation of an agricultural water market, a case study: part of the Mahyar irrigation network. Iran-Water Resources Research, 12(3), 35-49. (In Persian).
  4. Ataei, M., Moghaddasi, R., & Tahamipour, M. (2017). Determining the appropriate method of water pricing in the agricultural sector: A case study of Fars province. Agricultural Economics and Development, 24(96), 199-223. (In Persian).
  5. Australian Water Partnership. (2016). Valuing Water: A Framing Paper for the High-Level Panel on Water.
  6. Bann, C. (2002). An overview of valuation techniques: advantages and limitations. Asean Biodiversity, 2(2), 8-16.
  7. Bastani, M., Saleh Nia, N., & Mirbagheri, S. S. (2021). Estimating the economic value of water by calculating the willingness of citizens of Mashhad to pay for surplus agricultural water for drinking purposes. Iranian Journal of Irrigation and Drainage, 15(6), 1459-1468. (In Persian).
  8. de Paula, J., & Marques, R. (2022). Water Value Integrated Approach: A Systematic Literature Review. Water, 14(12), 1845.
  9. Ehsani, M., Hayati, B. A., Babollah, Dashti, Qader, Ghahramanzadeh, & Hosseinzadeh. (2012). Estimation of economic value of water in barley production in Qazvin plain irrigation network. Water and Soil Knowledge, 22 (1), 187-200. (In Persian).
  10. Esmaili Mokher Fardawi, M. A., Ebrahimi, K., Iraqinejad, S., & Fazl Elahi, H. (2018). Determining the economic value of agricultural water with a pricing approach based on the type of product in Markazi province. Water and Irrigation Management, 8(1), 149-163. (In Persian).
  11. Ghosh, N., & Bandyopadhyay, J. (2009). Methods of Valuation of Water Resources: A Review. South Asian Water Studies, 1(1), 19-50.
  12. Gibbons, D. C. (1986). The economic value of water. Washington DC: Resources for the Future.
  13. Hanemann, W. M., Rogers, P. P., Llamas, R., & Martínez-Cortina, L. (2006). Water crisis: myth or reality. The Economic Conception of Water.
  14. Hellegers, P., & Van Halsema, G. (2019). Weighing economic values against societal needs: questioning the roles of valuing water in practice. Water Policy, 21(3), 514-525.
  15. Hermans, L. M., van Halsema, G. E., & Mahoo, H. F. (2006). Building a mosaic of values to support local water resources management. Water Policy, 8(5), 415-434.
  16. Mohammadyari, F., Shayesteh, K., & Modbari, A. (2018). Estimation of drinking water quality value using conditional valuation method (Case study: Kermanshah city). Environmental Science, 44 (3), 489-501. (In Persian).Molle, F., Venot, J. P., & Hassan, Y. (2008). Irrigation in the Jordan Valley: Are water pricing policies overly optimistic?. Agricultural Water Management, 95(4), 427-438.
  17. Montazerhojat, A. H., & Mansouri, B. (2016). Economic Valuation of Environmental Benefits (Case Study of Bamdej Wetland). Iranian Journal of Applied Economic Studies, 5(18), 243-269. (In Persian).
  18. Mousavi, S. M., Sarai Tabrizi, M., & Talachi Langroudi, H. (2021). Investigation of economic value of water in environmental, agricultural and industrial uses (Case study: Urmia Lake catchment). Man and the Environment, 19(3), 79-95. (In Persian).Nazari, F., Amirnejad, H., & Shahpour, A. (2014). A comparative study of the economic value of drinking water (Case study: Karun River). 10th Biennial Conference on Agricultural Economics of Iran. (In Persian).
  19. Ostrom, E. (1990). Governing the commons: The evolution of institutions for collective action. Cambridge university press.
  20. OhabYazdi, S. A., Ahmadi, A., & Nikouei, A. (2014). Employing economic instruments to increase water productivity: A case study, Zayandehrood river basin. Iran-Water Resources Research, 10(1), 63-71. (In Persian).
  21. Pearce, D., Moran, D., & Biller, D. (2002). Handbook of Biodiversity valuation: A guide for policy makers. Canongate US.
  22. Sadat, M., Shourian, M., & Moridi, A. (2019). Reallocation of Water Resources in Transboundary River Basins Using the Bankruptcy Approach. Iranian Journal of Soil and Water Research, 50(5), 1141-1151. (In Persian).
  23. Sajjadifar, S. H., Pakrouh, S., Ghaneh, A. A., & Fathi, B. (2017). Efficient pricing of drinking water (Case study of Arak city). Journal of Water and Wastewater, 28 (1), 95-103 . (In Persian).
  24. Tahamipour Zarandi, M., Khazaei, A., & Kolivand, F. (2020). Analysis of tariff system and economic value of water in Iran's industrial sector. Water and Sustainable Development, 6(3), 19-30. (In Persian).
  25. Tahamipour Zarandi, M. (2017). Economic value, an approach to managing water demand in industrial use Case study: Chemical industry. Journal of Water and Wastewater, 28(1), 74-83. (In Persian).
  26. Tahamipour Zarandi, M., Molaei, F., & Moshrefi, R. (2017). Determining the optimal price of water for domestic use in Tehran using a coded model. Iran Water Resources Research, 13(3), 143-158. (In Persian).
  27. Tahamipour Zarandi, M., & Raisi, E. (2018). Estimating the economic value of the total ecosystem services of Kani Barazan International Wetland. Second Biennial Conference on Water Economics. (In Persian).
  28. Tahamipour Zarandi, M., & Yazdani, S. (2016). The Role of Economic Tools in Integrated Water Resources Management: A Case Study of Irrigation Water Pricing System in Watersheds of Western Iran. Iranian Journal of Agricultural Economics and Development Research, 47(3), 545-556. (In Persian).Vahedizade, S., Forouhar, L., & Kerachian, R. (2018). Comparative study of international water markets. Iran-Water Resources Research, 14(4), 184-197. (In Persian).
  29. (2014). Water security towards a values-based approach: global agenda council on water security. In World Economic Forum.
  30. World Bank. (2017). Charting a Path to Valuing the World’s Most Precious Resource.
  31. Young, R. A., & Loomis, J. B. (2014). Determining the economic value of water: concepts and methods. Routledge.
  32. Zarei, N., Mehrabi Beshrabadi, H., & Khosravi, M. (2014). Estimating the economic value of water in potato production; Case study: villages of Kurdistan and Hamedan provinces. Rural Development Strategies, 1(3), 19-32. (In Persian).
  33. Zolfagharipoor, M. A., Ahmadi, A., & Nikouei, A. (2020). Development of inter-sectional water market framework for improving economic efficiency of groundwater consumption. Iran-Water Resources Research, 16(1), 332-346. (In Persian).