Cap and trade markets for groundwater: Efficiency and distributional effects of a permit allocation mechanism
| dc.contributor.advisor | Williams, Ryan B. | |
| dc.contributor.committeeMember | Segarra, Eduardo | |
| dc.contributor.committeeMember | Mitchell, Donna M. | |
| dc.creator | Gao, Yang | |
| dc.date.accessioned | 2016-10-04T20:32:57Z | |
| dc.date.available | 2016-10-04T20:32:57Z | |
| dc.date.created | 2016-08 | |
| dc.date.issued | 2016-08-12 | |
| dc.date.submitted | August 2016 | |
| dc.date.updated | 2016-10-04T20:32:57Z | |
| dc.description.abstract | Agricultural production on the Texas High Plains is heavily dependent on the Ogallala Aquifer, which accounts for approximately 95 percent of groundwater pumped. Rapid groundwater depletion has been observed in the Ogallala Aquifer, which is attributed to low recharge rates and high water withdrawals. To manage this limited-renewable water resource, the High Plains Water Conservation District (HPWD) No.1 has established a rule to reduce pumping to 1.25 acre-feet per acre per year for all groundwater users within the HPWD. This research evaluates the efficiency and distributional effects of a cap and trade mechanism for the HPWD region under alternative policies of allocating the allowable groundwater by using two methods: an equal distribution method and a uniform percentage reduction method. Also, five policy alternatives are compared here to accomplish the water conservation objective. Marginal abatement curves are derived from producer profit functions, which include three irrigated crops. Optimal cropping choices, water use, permit water trades, and water permit prices are estimated simultaneously by maximizing producer profits. The relative efficiency of the programs is evaluated by comparing total producer profits. The study concludes that if the cap were set between 10 to 12 acre-inches per irrigated acre, and a frictionless market for water rights existed, the total desired water withdrawals could be achieved and total producer profits could be equivalent to the command and control policy limiting producers to 15 acre-inches. The results indicates that opportunity to trade water rights in a market could compensate groundwater users, an equal distribution cap will result in a more efficient use of groundwater resources compared to a uniform percentage reduction cap, which will result in less wealth redistribution. | |
| dc.format.mimetype | application/pdf | |
| dc.identifier.uri | http://hdl.handle.net/2346/68113 | |
| dc.language.iso | eng | |
| dc.rights.availability | Unrestricted. | |
| dc.subject | Groundwater | |
| dc.subject | Cap and trade | |
| dc.subject | Water market | |
| dc.title | Cap and trade markets for groundwater: Efficiency and distributional effects of a permit allocation mechanism | |
| dc.type | Thesis | |
| dc.type.material | text | |
| thesis.degree.department | Agricultural Applied Economics | |
| thesis.degree.discipline | Agricultural and Applied Economics | |
| thesis.degree.grantor | Texas Tech University | |
| thesis.degree.level | Masters | |
| thesis.degree.name | Master of Science |