The potential role for economic instruments in drought management

✍ Scribed by Stephen Merrett

• Publisher: John Wiley and Sons
• Year: 2004
• Tongue: English
• Weight: 78 KB
• Volume: 53
• Category: Article
• ISSN: 1531-0353
• DOI: 10.1002/ird.124

✦ Synopsis

Abstract

Climate change in the twenty‐first century will likely reduce the return period of drought events, indicating that drought management will be even more important in the future than it is already. In the case of England's Anglian region it is shown that two principal institutions are responsible for drought management—the Environment Agency and Anglian Water Services (AWS). The region has a fast‐growing population of more than 5 million people, it has 58% of the most productive agricultural land in England and Wales, and in some summers irrigation can make up 50% of water use.

An examination of the drought plans of the Agency and AWS demonstrates that in both cases the policy instruments that they deploy to manage drought are informational, infrastructural and regulatory. In neither case would they use water pricing as a management tool. Moreover, the government's drought plan guidelines for the water utilities make no reference to economic instruments of drought management nor do they suggest that utilities should review the economic impact on their customers of regulatory action.

The principal issues that would arise if water charging were to be deployed as a drought management instrument are then reviewed. The paper concludes by proposing that national government should evaluate the feasibility, costs, benefits and risks of replacing the regulatory instruments of drought management by economic instruments. Copyright © 2004 John Wiley & Sons, Ltd.