Lovely Faculty Of Business and Applied Arts Presentation Topic: Ground Water Pricing In Thialand Presented By: Asma Khanam Mfashingoma Bosco Jehangir Ali
Introduction• The Kingdom of Thailand is situated in eastern Asia and covers a land area of 513,115 km2 and is bordered by Malaysia, Myanmar, Laos People’s Republic and Cambodia in the southwest.• Current population 61.5 million• The country is divided into four main geographical regions: the North, the Central Plain, the Northeast and the South.• Total annual rainfall 800,000 Mm3.
Contd…..• Groundwater is recharged by rainfall and seepage streams and aquifers.• Current GDP of Thialand: USD 345.65 billion• Sector Wise GDP contribution in Thialand:• Agriculture:13.3%• Industry:34%• Service:52.7%
Water Pricing• Water pricing is a way of improving water allocation, encouraging optimal resource use and water conservation.• A planning concept IWRM is emerged that ensure a sustainable and efficient water supply and use.
IWRM principles• Freshwater is a finite and vulnerable resource essential to sustain life, development and the environment;• Water has an economic value in all its competing uses and should be recognized as an economic good;• Water management should be based on participatory approaches involving all users, planners and decision makers at all levels; and• Women play a central part in the provision, management and safeguarding of water management and therefore it should be gender sensitive.
Economic instruments to promote sustainable use of groundwater• Department of Mineral Resources (DMR) adopted groundwater pricing in 1984.• Metropolitan Waterworks Authority has completely banned the extraction of groundwater in areas where land subsidence caused problems.• Thailand, pricing is designed to achieve optimal resource use and tackle environmental concerns such as land subsidence
Key elements necessary for designing instruments:• The costs of using the resource should directly accrue to the user, ether private or public.• Affordability and acceptability• Environmental concerns (Cost Benefit Analysis)
Discussion And Analysis• The resource use is regulated through the Groundwater Act of 1977 and user charges.• Through the 1977 Groundwater Act, resource use was regulated through permits (command and control).• In Thailand, groundwater extraction by both private and public users amounted to 1.8 Mm3 per day covering a total of 7 595 wells.• Depletion of groundwater has raised the possibility of salt water intrusion due to seawater contamination of the groundwater reservoirs.
Results• Groundwater pricing can be used together with the regulatory method where a complete ban on groundwater extraction in critical areas is imposed.• Extraction is regulated by the Groundwater Act of 1977, its Amendments.
Limitations• The DMR could not control the amounts of volumes extracted due to lack of water meters at the water pumps.• Permits were transferable and could be revoked if extraction led to damages. These could also be withdrawn if piped water was made available in certain areas• Small users could extract water for private use and this was beyond the control of the DMR.• Lack of monitoring and enforcement.
Contd…..• According to 1977 Act, the user charge for groundwater cannot exceed the subsidised user charge for piped water,which prevented the groundwater user charge reflecting the true marginal cost of extraction.
Several Observations• Creation of environmental economic instruments is easy but enforcement and implementation is challenging and costly.• Poor design of instruments is likely to hinder the achievement of the intended objectives of imposing the charges.• The charges are unlikely to change environmental behaviour if they are not linked to the volume of resource use.
Contd…..• External costs and forgone benefits should be included in the user charge imposed on the resource users• Groundwater extraction should reach the level whereby the marginal benefits equal the marginal social costs.
QuestionHow could water use charges be applied to thecommercial livestock sector? Whichimprovements would it bring about and whatdifficulties may be encountered?