Evaluation of the financial impact of electricity subsidy on the returns of tubewell owners and water buyers under declining watertables in Balochistan, Pakistan

Khair, Syed M. and Culas, Richard J. and Mushtaq, Shahbaz (2012) Evaluation of the financial impact of electricity subsidy on the returns of tubewell owners and water buyers under declining watertables in Balochistan, Pakistan. In: 41st Australian Conference of Economists (ACE 2012), 8-12 July 2012, Melbourne, Australia.

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Abstract

This study examines the financial impacts of electricity subsidy on tubewell owners and water buyers, and proposes alternative subsidy policy options that could balance the efficiency and equity. The results suggest that the subsidy plays a key role in stabilising production by providing financial incentives to tubewell owners to stabilise extraction cost under the declining watertables. The removal of subsidy will have considerable financial implications on tubewell owners, as well as water buyers. Considering the equity concerns and possible social and political turmoil, in the short run the study proposes that subsidy on electricity may be reduced to 50% to avoid social unrest and political repercussions. However, in the long run, to achieve efficiency and sustainability, the study suggests: (i) adoption of more appropriate cropping patterns suitable with local climatic conditions; (ii) adoption of most suitable and highly efficient irrigation techniques and technology; (iii) improved long-term ground water security through groundwater recharge via construction of dams; and (iv) strengthening of water markets system and institutional infrastructure.


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Item Type: Conference or Workshop Item (Commonwealth Reporting Category E) (Paper)
Refereed: Yes
Item Status: Live Archive
Additional Information: Authors retain copyright (see Conference website, call for papers).
Depositing User: epEditor USQ
Faculty / Department / School: Current - USQ Other
Date Deposited: 26 Sep 2012 07:11
Last Modified: 14 Aug 2014 04:48
Uncontrolled Keywords: financial impact; electricity; subsidy; returns; water table
Fields of Research (FOR2008): 04 Earth Sciences > 0406 Physical Geography and Environmental Geoscience > 040608 Surfacewater Hydrology
14 Economics > 1402 Applied Economics > 140202 Economic Development and Growth
14 Economics > 1402 Applied Economics > 140205 Environment and Resource Economics
Socio-Economic Objective (SEO2008): D Environment > 96 Environment > 9609 Land and Water Management > 960999 Land and Water Management of Environments not elsewhere classified
URI: http://eprints.usq.edu.au/id/eprint/21998

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