The document summarizes groundwater pricing policies in Thailand. It discusses how Thailand adopted groundwater pricing in 1984 to regulate extraction through permits and user charges. However, enforcement was a challenge due to lack of monitoring and issues such as small private users being difficult to control. The document analyzes how economic instruments can be used alongside regulatory bans to manage groundwater sustainably and achieve optimal resource allocation, but poor design and implementation of policies can hinder their objectives.

1. Lovely Faculty Of Business and Applied Arts
Presentation Topic:
Ground Water Pricing In Thialand
Presented By:
Asma Khanam
Mfashingoma Bosco
Jehangir Ali

3. 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.

4. 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%

5. 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.

6. 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.

7. 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

8. 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)

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. Question
How could water use charges be applied to the
commercial livestock sector? Which
improvements would it bring about and what
difficulties may be encountered?