Alternative institutional arrangements towards optimal water allocation

[摘要] The limited natural availability of water resources in South Africa coupled with theincreasing competition between water users demands that, reallocation andsustainable use of water be given serious attention.Bringing into perspective factors leading to the vulnerability of water resources, focusis placed on institutional issues, which is becoming a thorny issue nationally.Drawing on institutional economic theory a generic water institutional framework isdeveloped to assist in shaping institutional arrangements towards achieving economicand social objectives simultaneously, in order to guarantee water security.In this thesis an ideal institutional framework was developed and used in conjunctionwith global trends and patterns in water policy and institutional arrangements, toevaluate the South African water law and water policy. The evaluation revealed thatfactors like: excessive government control of water management institutions;bureaucratic consented water reallocations; administratively set pricing mechanisms;lack of appropriate arrangements to facilitate tradable entitlements (like definingexclusive rights to entitlements); unclear water transfer arrangements; and lack ofdefinitive institutional provisions for integrated demand and supply management,deviate from current international water institutional trends and also fall short of anideal institutional arrangement that will lead to water security.The weaknesses in the current South African water laws and policies prompted thesearch for alternative institutional arrangements, which particularly have thepotential to offer more opportunities for effective water allocation and management,and largely based on decentralisation and full stakeholder participation.A number of alternatives were studied and Capacity Sharing (CS) was identified asthe most appropriate. Capacity sharing is an institutional arrangement with propertyrights structured to allocate water among multiple users of water resource systems.This form of institutional arrangement provides each user or group of users of reservoir water with perpetual or long-term rights to a percentage of reservoirinflows and a percentage of reservoir storage capacity.Capacity Sharing has the capacity to solve the potential South African water scarcityproblem, because of its dependence on water markets, as well as its decentralisedtendency. In addition, the attributes of flexibility, predictability and security of tenure,rank CS as one of the best alternative institutional arrangements. However, criticalissues like: water rights; water transfers; water markets; and the generaladministrative control, need some minor institutional amendments if CS is to beadopted in South Africa.A case study at Vanderkloof dam assumes the existence of CS in which thearrangement provides Ramah Canal irrigation water users exclusive right to allottedreservoir capacity shares as well as inflow shares, in an effort to test the applicabilityof CS, as well as the benefits it can offer the water user.A simulation model SIM-DY-SIM was used to determine Marginal Value Products(MVPs) for 75-hectare farm, under two Crop Mix scenarios of cultivating lucern,maize and wheat; potatoes, maize and wheat. The results show that, MVPs (whichdetermine the farmer's ability to pay for water) differ significantly with respect tocrop mixes and also across seasons.The shadow prices (MVPs) were also derived at different water scarcity scenarios todetermine the optimal water use policies that the farmer would pursue. The MVPs,indicating the ability to pay in the immediate season or in the future, provide thecapacity for determining water prices in both the present and in the future. Thischaracteristic is very vital for trading water rights.The MVPs also facilitate good water use decision-making since they are linked to thedecision to release or save water. The implications of these MVP values for watertransfers and trading and hence allocation and efficient use of water becomesapparent.The other set of results compared the use of SDP derived rules with the alternative ofno rules pertaining to the farmer's water supply reliability. It is noted that reservoircapacity and inflow shares, which ultimately determine the farmer's water supplyreliability, were better-managed using SDP derived rules than without rules.Deductions from the SDP simulations from the viewpoint of the usefulness of MVPs tovalue water, to the advantages of using SDP derived rules to make optimal water usedecisions, opens a new frontier for efficient allocation and use of South Africa's waterresources.

[发布机构] University of the Free State