Analyzing Economic Tradeoffs of Water Use in the Nam Ngum River Basin, Lao PDR

Improving the effectiveness of aid: an evaluation of prospective Mekong irrigation investments

“…The total irrigation area in Lao PDR was estimated at 166,000 ha in the most recent available reporting, Downloaded by [University of Sussex Library] at 03:46 28 June 2016 and some aspirational plans foresee an increase in area to as much as 548,916 ha by 2030 (MRC, 2009). Bartlett et al (2012) evaluated a scenario involving expanding irrigated area in the Nam Ngum Basin by more than 100,000 ha. In the past, Lao government and foreign aid irrigation investments were motivated by the desire to raise glutinous rice production (MRC, 2009).…”

“…The effort to review and synthesize information on key factors determining benefits and costs of irrigation investments in similar contexts to our case study led us to develop a conceptual BCA with three distinct components: (1) a farm irrigation returns component, consisting of yield, price and production cost and annual growth rates of these three factors (Bartlett et al, 2012;MRC, 2009;SiliPhouthone, Hanboonsong, Taweekul, & Poungchompu, 2012;Yu & Fan, 2009); (2) an irrigation infrastructure cost model dependent on capital set-up costs, operation and maintenance (O&M) costs and land utilization estimates (ADB, 2005;ISMR, 2002;van de Walle & Gunewardena, 2001); and (3) environmental costs from the impact of irrigation on wetland-based fisheries downstream of the Nam Ngum Basin, the value of which depends on the expected decline in catch and fish price (Costanza et al, 2011;Lorenzen et al, 2007;Kyophilavong, 2008;Sverdrup-Jensen, 2002;Sumaila, Marsden, Watson, & Pauly, 2007).…”

“…The benefit-cost analysis presented expands on previous evaluations (Bartlett et al, 2012;Lacombe et al, 2014) with more comprehensive assessment, including financial as well as environmental cost, consideration of possibly lower-than-expected utilization rates, and other cost and return uncertainties. Additionally, the assessment puts benefits from proposed large-scale irrigation investment into perspective in two ways: by providing a comparison between the effectiveness of irrigation investment and the effectiveness of investments in other sectors, including education, road construction and agricultural research and development, at reducing poverty; and by providing assessment of returns relative to investments in smaller farm-scale small-pump-based irrigation investment.…”

“…The focus is on the Mekong Basin because recent development of hydropower dams to meet growing energy demands in the region is expected to effectively reduce the cost of setting up irrigation schemes. The argument logic is that the cost of adding irrigation infrastructure to existing hydropower infrastructure should be much lower than the cost of setting up new irrigation schemes (Bartlett, Baker, Lacombe, Douangsavanh, & Jeuland, 2012;Lacombe et al, 2014). A recent survey of regional government and aid agency decision makers in the Mekong reinforced this view, with a finding that the benefits of irrigation were likely to exceed costs and lead to significant poverty reduction (Smajgl & Ward, 2015).…”

The costs of uncoordinated infrastructure management in multi-reservoir river basins

“…Also, it includes constraints that require a storage buffer for flood control and environmental flow requirements, though the economic benefits of flood control and ecological protection are not incorporated into the objective function due to lack of valuation data relating to these aspects. Other constraints govern the availability of agricultural land and seasonal energy demand (Bartlett et al 2012). 2 This formulation thus allows determination of the marginal opportunity costs (or shadow values) associated with relaxing those constraints (e.g.…”