Environmental Valuation & Cost-Benefit News

Abstract: Excessive groundwater abstraction is a major problem in Oman, primarily in the Batinah coastal area where it results in seawater intrusion. The Government began to address the problem in the 1990s by encouraging the use of more efficient irrigation systems, replacing date palms with winter vegetable crops and using treated wastewater for municipal irrigation. However, 15 years later, seawater intrusion in the Batinah aquifers is still advancing at an alarming pace. This paper analyses the relative merits of strategies to control groundwater pumping based on water quotas, electricity quotas and electricity pricing. A cost benefit approach is used to evaluate the feasibility of three strategies over a period of 25 years and to compare them to the “business as usual” option. Results show that the net present loss to the community when no active policy is implemented amounts to (−$288) million. Imposing water quotas on tubewells would give a net present benefit of $153 million. However, such quotas would give the lowest present benefit and create inequity among farmers. Other possible approaches would be to control the pumping of groundwater from all wells – tubewells and dug wells – by enforcing energy quotas and by increasing the price of electricity used to pump water. The net present benefits would be greater and the costs to farmers would be more fairly spread. The results of cost–benefit analysis show that enforcing an electricity quota, coupled with removal of the subsidy on the electricity price, is the easiest and most equitable solution to implement.

Keywords: Groundwater management; Water quotas; Water metering; Energy quotas; Subsidy; Tax

by Slim Zekri; Department of Agricultural Economics and Rural Studies, College of Agricultural and Marine Sciences, Sultan Qaboos University, P.O. Box 34, PC 123, Al-Khod, Muscat, Oman; Tel.: +968 92 309 149; fax: +968 24413418.

Agricultural Water Management via Elsevier Science Direct www.ScienceDirect.com
Volume 95, Issue 3, March 2008, Pages 243-252
http://dx.doi.org/10.1016/j.agwat.2007.10.006