Dynamic taxation schemes to manage irrigation-induced salinity

Abstract

This paper uses a dynamic model to explore the issue of irrigation-induced salinity, which puts irrigation at risk in most irrigated areas throughout the world. We address the design of instruments that an irrigation district board could implement to induce irrigators to take sustainable irrigation decisions. In our approach, the irrigators located above an aquifer participate in the accumulation of groundwater, a stock pollution. We analyse input-based instruments to induce the agents to follow the optimal stock path.

International Environmental Agreements: Design of Optimal Transfers Under Heterogeneity

“…The Markovian structure of penalties ensures their flexibility as the pollution stock changes over time. Our analysis is thus related to earlier work on Markovian taxes that address stock externalities in dynamic environmental games [4,[14][15][16]. These papers propose linear tax schedules with zero intercepts.…”

Managing correlated stock externalities: water taxes with a pinch of salt

“…Refer to appendix B-4 for the demonstration that τ* 2 > 0: the tax rate unambiguously increases with the collective stock, as for a unique stock (Benchekroun and Long, 1998; Legras and Lifran, 2006). This is not surprising since inducing the agents to correctly internalize their impact on the current and future states of the stocks, the tax should send them the message that the more they contribute to the stocks now, the higher their tax liability will be in the future.…”

“…Benchekroun and Long (1998) show that the polluting emissions of oligopolistic producers may be subsidized at the beginning of the time horizon in order to counterbalance the market power effect that arises in oligopolistic settings. In the case of groundwater management, no such strategic incentive was found (Legras and Lifran, 2006). However, numerical simulations conducted with the set of parameters depicted in appendix A-3 put in perspective that negative values of τ* 1 are compatible with low values of β and high values of k 3 ; in other words, the rootzone salt stocks are highly detrimental, either because they accumulate fast or because the damage term is high.…”