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Water Policy Vol 10 No S1 pp 11–21 © IWA Publishing 2008 doi:10.2166/wp.2008.049 Rising energy prices and the economics of water in agricultureDavid Zilbermana, Thomas Sproula, Deepak Rajagopalb, Steven Sextona and Petra HellegerscaDepartment of Agricultural and Resource Economics, University of California at Berkeley, 207 Giannini Hall, Berkeley, CA 94720, USA . *?Corresponding author. Member, Giannini Foundation. E-mail: zilber@are.berkeley.edubEnergy and Resources Group, University of California at Berkeley, 310 Barrows Hall, Berkeley, CA 94720, USA cInternational Water Management Institute, P.O. Box 2075, Colombo, Sri Lanka ABSTRACT Rising energy prices will alter water allocation and distribution. Water extraction and conveyance will become more costly and demand for hydroelectric power will grow. The higher cost of energy will substantially increase the cost of groundwater, whereas increasing demand for hydroelectric power may reduce the price and increase supply of surface water. High energy prices and geopolitical considerations drive investment in land-and water-intensive biofuel technology, diverting land and water supplies to energy production at the expense of food production. Thus, rising energy prices will alter the allocation of water, increase the price of food and may have negative distributional effects. The impact of rising energy prices and the introduction of biofuels can be partly offset by the development and adoption of new technologies, including biotechnology. The models considered here can be used to determine the effects of rising energy prices on inputs, outputs, allocation decisions and impact on distribution. Keywords: Biofuels; Conveyance; Groundwater; Surface water; Water price eProduct: Buy this article for £24.00 (IWA MEMBER PRICE: £18.00) All prices include VAT. For customers where VAT should not be applied, the VAT amount will be removed upon payment |
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