A taxonomy of economic water policy instruments and their dynamic effects for sustainable water management

Esther Díaz-Cano Ocaña; Julio Berbel Vecino; Nazaret Mª Montilla López; Carlos Gutiérrez Martín

A taxonomy of economic water policy instruments and their dynamic effects for sustainable water management

Díaz-Cano, Esther ^[1] ; Berbel, Julio ^[1] ; Montilla-López, Nazaret M. ^[1] ; Gutiérrez-Martín, Carlos ^[1]
1. [1] Universidad de Córdoba (Colombia)
  
  Universidad de Córdoba (Colombia)
  
  Colombia
Localización: Economía agraria y recursos naturales, ISSN-e 2174-7350, ISSN 1578-0732, Vol. 26, Nº. 1, 2026
Idioma: inglés
DOI: 10.7201/earn.2026.01.07
Títulos paralelos:
- Taxonomía de los instrumentos económicos de política hídrica y sus efectos dinámicos para una gestión sostenible del agua
Enlaces
- Texto completo (pdf)
- Texto completo
Resumen
- español
  Los instrumentos económicos se utilizan ampliamente en la política ambiental, pero su aplicación en la gobernanza del agua a menudo carece de claridad contextual. Este artículo desarrolla una taxonomía integrada de instrumentos económicos para la gestión sostenible del agua y propone un marco para evaluar el desempeño temporal. Las intervenciones se caracterizan por el tipo de implementación (única, discontinua o continua) y el tipo de respuesta (estática o dinámica, con efectos reforzadores o erosivos). Esta combinación clarifica cómo los ajustes conductuales e institucionales condicionan los resultados, apoyando el diseño y la evaluación de instrumentos robustos y adaptables.
- English
  Economic instruments are widely used in environmental policy; however, their application in water governance often lacks contextual clarity. This paper presents an integrated taxonomy of economic instruments for sustainable water management and proposes a complementary, trajectory-based framework for assessing time-dependent performance. Interventions are characterised by implementation profile (single, discontinuous, or continuous) and by response type (static or dynamic, with reinforcing or eroding effects). Combining these dimensions clarifies how behavioural and institutional adjustment shapes outcomes over time, supporting the design and evaluation of robust, adaptable, and context-sensitive instruments for long-term water sustainability.
Referencias bibliográficas
- Abu Madi, M., Al-Sa’ed, R., Braadbaart, O. & Alaerts, G. (2008). “Public perceptions towards wastewater reuse in Jordan and Tunisia”....
- Adamson, D. & Loch, A. (2014). “Possible negative feedbacks from ‘gold-plating’ irrigation infrastructure”. Agricultural Water Management,...
- Adelman, D.D. (2003). “A successful water conservation program in a semiarid region of Nebraska”. Journal of the American Water Resources...
- Alliance for Water Stewardship. (2023). A global standard for water stewardship. Retrieved from: Alliance for Water Stewardship. https://a4ws.org/Alliance...
- Aubry, C., Consalès, J.-N., Kebir, L. & Barraqué, B. (2014). “L’agriculture urbaine en question: Épiphénomène ou révolution lente? Dialogue...
- Berbel, J., Borrego-Marin, M.M., Exposito, A., Giannoccaro, G., Montilla-Lopez, N.M. & Roseta-Palma, C. (2019a). “Analysis of irrigation...
- Berbel, J. & Expósito, A. (2020). “The theory and practice of water pricing and cost recovery in the Water Framework Directive”. Water...
- Berbel, J., Expósito, A., Gutiérrez-Martín, C. & Mateos, L. (2019b). “Effects of the irrigation modernization in Spain 2002–2015”. Water...
- Berbel, J., Gutiérrez-Martín, C. & Expósito, A. (2018). “Impacts of irrigation efficiency improvement on water use, water consumption...
- Berbel, J., Gutiérrez-Martín, C., Rodríguez-Díaz, J.A., Camacho, E. & Montesinos, P. (2015). “Literature review on rebound effect of water...
- Binet, M.-E., Garcia-Valiñas, M.A. & Suarez-Fernandez, S. (2024). “Nudges in sustainable water management practices: Implementation, key...
- Blue Angel. (2025). The German ecolabel. Retrieved from: Blue Angel. https://www.blauer-engel.de/en
- Böcker, T. & Finger, R. (2016). “European pesticide tax schemes in comparison: An analysis of experiences and developments”. Sustainability,...
- Brent, D. & Wichman, C. (2022). Do behavioral nudges interact with prevailing economic incentives? Pairing experimental and quasi-experimental...
- Carney, C.P., Endter-Wada, J. & Welsh, L.W. (2021). “The accumulating interest in water banks: Assessing their role in mitigating water...
- Chabé-Ferret, S., Le Coent, P., Reynaud, A., Subervie, J. & Lepercq, D. (2019). “Can we nudge farmers into saving water? Evidence from...
- Chen, Y., Luo, T., Tian, G. & Zhao, Q. (2024). “Can a water bank improve groundwater rights market efficiency? A study based on Monte...
- Clifford, P., Landry, C.J. & Larsen-Hayden, A. (2004). Analysis of water banks in the western states. Olympia, USA: Washington State University,...
- Crase, L., O’Keefe, S. & Kinoshita, Y. (2012). “Enhancing agrienvironmental outcomes: Market-based approaches to water in Australia’s...
- Crespi, F., Ghisetti, C. & Quatraro, F. (2015). Taxonomy of implemented policy instruments to foster the production of green technologies...
- Croson, R. & Treich, N. (2014). “Behavioral environmental economics: Promises and challenges”. Environmental and Resource Economics, 58(3),...
- Delacámara, G., Gómez, C.M. & Maestu, J. (2014). “Water trading opportunities and challenges in Europe”. In Burnett, K., Howitt, R., Roumasset,...
- Dellapenna, J.W. (2000). “The importance of getting names right: The myth of markets for water”. William & Mary Environmental Law and...
- Dixon, P.B., Rimmer, M.T. & Wittwer, G. (2012). “Buybacks to restore the southern Murray-Darling Basin”. In Wittwer, G. (Ed.): Economic...
- Duval, R. (2008). A taxonomy of instruments to reduce greenhouse gas emissions and their interactions. Paris, France: OECD Publishing. https://doi.org/10.1787/236846121450
- European Commission. (2023). Eco-schemes. Retrieved from: European Commission - Common agricultural policy. https://agriculture.ec.europa.eu/common-agricultural-policy/income-support/eco-schemes_en
- European Commission. (2024). Preventing and mitigating water scarcity and droughts in the EU. Retrieved from: European Commission - Energy,...
- European Court of Auditors. (2021). Sustainable water use in agriculture: CAP funds more likely to promote greater rather than more efficient...
- Expósito, A. & Berbel, J. (2024). “Economic policy instruments in water governance”. In Fritsch, O. & Benson, D. (Eds.): Handbook...
- Fereres, E., Villalobos, F., Orgaz, F., Minguez, M., Van Halsema, G. & Perry, C. (2017). “Commentary: On the water footprint as an indicator...
- Ferraro, P.J., Miranda, J.J. & Price, M.K. (2011). “The persistence of treatment effects with norm-based policy instruments: Evidence...
- Fielding, K.S., Spinks, A., Russell, S., McCrea, R., Stewart, R. & Gardner, J. (2013). “An experimental test of voluntary strategies to...
- Finney, C. (2013). “Water abstraction charges as a water management tool”. Irrigation and Drainage, 62(4), 477-487. https://doi.org/10.1002/ird.1735
- GLOBALG.A.P. (2025). Sustainable program for irrigation and groundwater use (SPRING). Retrieved from: Globalgap - Solutions. https://www.globalgap.org/what-we-offer/solutions/
- Gómez Gómez, C.M., Pérez-Blanco, C.D., Adamson, D. & Loch, A. (2018). “Managing water scarcity at a river basin scale with economic instruments”....
- Goulder, L.H. & Parry, I.W. (2008). “Instrument choice in environmental policy”. Review of Environmental Economics and Policy, 2(2), 152-174....
- Grafton, R.Q. & Wheeler, S.A. (2018). “Economics of water recovery in the Murray-Darling Basin, Australia”. Annual Review of Resource...
- Hadjigeorgalis, E. (2009). “A place for water markets: Performance and challenges”. Applied Economic Perspectives and Policy, 31(1), 50-67....
- Heinz, I. (2002). “Voluntary agreements as an instrument to solve conflicts between farmers and water suppliers”. In Steenvoorden, J., Claessen,...
- Hernández-Pacheco Algaba, M., Huyghe, W., van Leeuwen, K., Koop, S. & Eisenreich, S. (2024). “Assessment and actions to support integrated...
- Huffaker, R. (2008). “Conservation potential of agricultural water conservation subsidies”. Water Resources Research, 44(7), W00E01. https://doi.org/10.1029/2007WR006183
- Intergovernmental Panel on Climate Change. (2015). “National and sub-national policies and institutions”. In Intergovernmental Panel on Climate...
- Intergovernmental Panel on Climate Change. (2023). Climate Change 2023: Synthesis Report. Contribution of Working Groups I, II and III to...
- Judge, P. (2022). European operators plan to cut water use to 400ml per kWh by 2040. Retrieved from: DCD. https://www.datacenterdynamics.com/en/news/european-operators-plan-to-cut-water-use-to-400ml-per-kwh-by-2040/
- Kieser, M.S. & McCarthy, J.L. (2015). “Water quality trading in Ohio”. In Lago, M., Mysiak, J., Gómez, C.M., Delacámara, G. & Maziotis,...
- Lago, M., Mysiak, J., Gómez, C.M., Delacámara, G. & Maziotis, A. (Eds.). (2015). Use of economic instruments in water policy: Insights...
- Leflaive, X. (2024). The economics of water scarcity OECD Environment Working Papers, No. 239. Paris: OECD Publishing. https://doi.org/10.1787/81d1bc0a-en
- Liu, M., Yang, L. & Min, Q. (2019). “Water-saving irrigation subsidy could increase regional water consumption”. Journal of Cleaner Production,...
- Loch, A., Pérez-Blanco, C.D., Carmody, E., Felbab-Brown, V., Adamson, D. & Seidl, C. (2020). “Grand theft water and the calculus of compliance”....
- Lu, L., Deller, D. & Hviid, M. (2019). “Price and behavioural signals to encourage household water conservation: Implications for the...
- Lund, J.R. & Israel, M. (1992). Recent California water transfers: Emerging options in water management. Final report. Davis, United States:...
- Marcus, F., Green Nylen, N., Owen, D. & Kiparsky, M. (2024). Five guiding principles for effective voluntary agreements: A case study...
- McCann, L., Colby, B., Easter, K.W., Kasterine, A. & Kuperan, K.V. (2005). “Transaction cost measurement for evaluating environmental...
- Medellín-Azuara, J., Howitt, R.E. & Lund, J.R. (2013). “Modeling economic-engineering responses to drought: The California case”. In Schwabe,...
- Megdal, S.B., Dillon, P. & Seasholes, K. (2014). “Water banks: Using managed aquifer recharge to meet water policy objectives”. Water,...
- Molle, F. & Berkoff, J. (2007). “Water pricing in irrigation: mapping the debate in the light of experience”. In Molle, F. & Berkoff,...
- Molle, F. & Closas, A. (2020a). “Comanagement of groundwater: A review”. WIREs Water, 7(1), e1394. https://doi.org/10.1002/wat2.1394
- Molle, F. & Closas, A. (2020b). “Groundwater licensing and its challenges”. Hydrogeology Journal, 28(6), 1961-1974. https://doi.org/10.1007/s10040-020-02179-x
- Möller-Gulland, J., Lago, M., McGlade, K. & Anzaldua, G. (2015). “Effluent tax in Germany”. In Lago, M., Mysiak, J., Gómez, C.M., Delacámara,...
- Montilla-López, N.M., Gutiérrez-Martín, C. & Gómez-Limón, J.A. (2016). “Water banks: What have we learnt from the international experience?”....
- Muradian, R., Arsel, M., Pellegrini, L., Adaman, F., Aguilar, B., Agarwal, B., Corbera, E., Ezzine de Blas, D., Farley, J., Froger, G., Garcia-Frapolli,...
- Natural Resources Conservation Service. (2025). Environmental Quality Incentives Program (EQIP). Retrieved from: Natural Resources Conservation...
- Nickerson, R.C., Varshney, U. & Muntermann, J. (2013). “A method for taxonomy development and its application in information systems”....
- Organisation for Economic Co-operation and Development. (2001). Policies to enhance sustainable development. Paris: OECD Publishing. https://doi.org/10.1787/9789264192683-en
- Organisation for Economic Co-operation and Development. (2009). The economics of climate change mitigation: How to build the necessary global...
- Organisation for Economic Co-operation and Development. (2015). OECD principles on water governance. Retrieved from: OECD. https://www.oecd.org/en/topics/sub-issues/water-governance/the-oecd-principles-on-water-governance-and-implementation-strategy.html
- Pacheco-Vega, R. (2020). “Environmental regulation, governance, and policy instruments, 20 years after the stick, carrot, and sermon typology”....
- Palomo-Hierro, S., Settre, C., Loch, A. & Wheeler, S. (2016). “Mercados de agua en Australia y California. Qué podemos aprender de ellos?”....
- Pannell, D.J. (2008). “Public benefits, private benefits, and policy mechanism choice for land-use change for environmental benefits”. Land...
- Pedersen, A., Nielsen, H. & Andersen, M. (2015). “The Danish pesticide tax”. In Lago, M., Mysiak, J., Gómez, C.M., Delacámara, G. &...
- Pérez-Blanco, C.D. & Gutiérrez-Martín, C. (2017). “Buy me a river: Use of multi-attribute non-linear utility functions to address overcompensation...
- Perrot-Maître, D. (2006). The Vittel payments for ecosystem services: A perfect PES case?. London: International Institute for Environment...
- Perry, C. (2014). “Water footprints: Path to enlightenment, or false trail?”. Agricultural Water Management, 134, 119-125. https://doi.org/10.1016/j.agwat.2013.12.004
- Perry, C. & Steduto, P. (2017). Does improved irrigation technology save water? A review of the evidence. Cairo: FAO. https://openknowledge.fao.org/handle/20.500.14283/i7090en
- Pronti, A. & Berbel, J. (2023). “The impact of volumetric water tariffs in irrigated agriculture in Northern Italy”. Environmental Impact...
- Pujol, J., Raggi, M. & Viaggi, D. (2006). “The potential impact of markets for irrigation water in Italy and Spain: A comparison of two...
- Qureshi, M.E., Grafton, R.Q., Kirby, M. & Hanjra, M.A. (2011). “Understanding irrigation water use efficiency at different scales for...
- Revesz, R.L. & Stavins, R.N. (2004). Environmental law and public policy. Working Paper 13575. Retrieved from: National Bureau of Economic...
- Rey, D., Calatrava, J. & Garrido, A. (2016). “Optimisation of water procurement decisions in an irrigation district: the role of option...
- Rey, D., Pérez-Blanco, C.D., Escriva-Bou, A., Girard, C. & Veldkamp, T.I.E. (2018). “Role of economic instruments in water allocation...
- Rinaudo, J.-D., Calatrava, J. & De Byans, M.V. (2016). “Tradable water saving certificates to improve urban water use efficiency: an ex-ante...
- Rouillard, J., Babbitt, C., Pulido-Velazquez, M. & Rinaudo, J.-D. (2021). “Transitioning out of open access: A closer look at institutions...
- Sapino, F., Pérez-Blanco, C.D., Gutiérrez-Martín, C., García-Prats, A. & Pulido-Velazquez, M. (2022). “Influence of crop-water production...
- Scheierling, S.M., Loomis, J.B. & Young, R.A. (2006). “Irrigation water demand: A meta-analysis of price elasticities”. Water Resources...
- Schubert, C. (2017). “Green nudges: Do they work? Are they ethical?”. Ecological Economics, 132, 329-342. https://doi.org/10.1016/j.ecolecon.2016.11.009
- Schultz, P.W., Messina, A., Tronu, G., Limas, E.F., Gupta, R. & Estrada, M. (2016). “Personalized normative feedback and the moderating...
- Seyranian, V., Sinatra, G.M. & Polikoff, M.S. (2015). “Comparing communication strategies for reducing residential water consumption”....
- Shortle, J. (2013). “Economics and environmental markets: Lessons from water-quality trading”. Agricultural and Resource Economics Review,...
- Strong, A. & Goemans, C. (2014). “Quantity uncertainty and demand: The case of water smart reader ownership”. The B.E. Journal of Economic...
- Strong, C., Kuzma, S., Vionnet, S. & Reig, P. (2020). Achieving abundance: Understanding the cost of a sustainable water future. Retrieved...
- Tabaichount, B., Wood, S.L.R., Kermagoret, C., Kolinjivadi, V., Bissonnette, J.F., Zaga Mendez, A. & Dupras, J. (2019). “Water quality...
- Tiwari, D. & Dinar, A. (2002). Role and use of economic incentives in irrigated agriculture. Working Paper 31957. Washington, DC: World...
- U.S. Environmental Protection Agency. (2025). WaterSense. Retrieved from: EPA. https://www.epa.gov/watersense
- Vangipuram, B., Gonzalez, J.Z. & Erfani, T. (2025). “Making waves: Is water quality trading a false promise for balancing ecology and...
- Wang, H., Ploegmakers, H., van der Krabben, E. & Meijerink, S. (2024). “The environmental effectiveness of water quality trading: Evidence...
- Ward, F.A. & Pulido-Velazquez, M. (2008). “Water conservation in irrigation can increase water use”. Proceedings of the National Academy...
- Wheeler, S.A. & Cheesman, J. (2013). “Key findings from a survey of sellers to the Restoring the Balance programme”. Economic Papers:...
- Whitten, S., van Bueren, M. & Collins, D. (2003). An overview of market-based instruments and environmental policy in Australia. Retrieved...
- Wittwer, G. (2011). “Confusing policy and catastrophe: Buybacks and drought in the Murray–Darling Basin”. Economic Papers: A journal of applied...
- Zanella, M.A., Schleyer, C. & Speelman, S. (2014). “Why do farmers join Payments for Ecosystem Services (PES) schemes? An assessment of...
- Zilberman, D. & de Gorter, H. (1984). The political economy of public good provision. Working Paper No. 308. Retrieved from: AgEcon Search....
- Zwickle, A., Feltman, B.C., Brady, A.J., Kendall, A.D. & Hyndman, D.W. (2021). “Sustainable irrigation through local collaborative governance:...