Integrating demand- and supply-side management: pricing and watershed conservation
Kimberly Burnett – University of Hawaii Economic Research Organization (UHERO)
Economic optimization of water is a dynamic resource allocation problem. Decisions to extract water today affect costs, prices, and groundwater stocks in the future. Even if current water prices are too low, purveyors of water services often face revenue requirements/restrictions that limit potential welfare-improving rate changes. We present some challenges related to demand-side management strategies and discuss promising areas for future research. Supply-side instruments, such as watershed conservation, can also be used to complement demand-side management. Although much effort is already being put into conserving Hawaii’s watersheds, more work needs to be done to understand and quantify how those investment dollars translate – via various conservation activities – to valuable ecosystem services such as the provision of groundwater recharge.
Thursday Dec. 5th, 2013
POST 126 UH Manoa Campus