This document discusses how to scale up collective action across urban and rural areas to manage water competition. It argues that urbanization intensifies competition for water between cities and agriculture. However, incentives can move beyond a zero-sum approach by sharing benefits between urban and rural areas through tools like water markets, irrigation modernization subsidies, and drought insurance. Scaling up these solutions requires coordination without crowding out local governance, which may require complementary institutions to build capacity at multiple levels.

1. Scaling Up Collective Action across the
Urban-Rural Interface
Building Incentives to Bridge the Divide
Contact: Dr. Dustin E. Garrick
dustin.garrick@ouce.ox.ac.uk
Photos: Aguilar et. al 2016, Upstream Tech, Aguilar et. al 2016

2. Hotspots and Blind Spots
Escalating urbanisation intensifies competition between cities and
agriculture.
Flörke, M., Schneider, C. & McDonald, R. I. (2018). Water competition between cities and agriculture driven by
climate change and urban growth. Nature Sustainability, 1, 51–58.

3. Drivers, Hotspots and Blind spots
What drives water reallocation and markets?
Hotspots and Blind Spots
Drought risks cascade, farmers lose before
cities

4. Incentives can move beyond a zero-
sum
Sisto, N. et al. 2016
Garrick et al. 2018, in prep.
Rapid growth in Monterrey, Mexico Reallocation to city from downstream irrigation district
Aguilar and Garrick, 2018, in prep.
Portfolio of compensation
1. Alternative water supplies
(reuse)
2. Subsidised irrigation
modernisation
3. Monetary payments

5. Incentive-based water conservation
Interruptible Contracts
City:
• Drought Insurance
• More predictable rate hikes
Farm:
• Alternative to curtailment
in some instances.
• Financing for capital
investment in others
Irrigation Modernization
(Subsidized)
City:
• Drought Insurance
• Long-term water supply
Farm:
• Financing for capital
investment in others
Water Markets
City:
• Drought Insurance
• Long-term water
supply
Farm:
• Gains from trade

6. Bridging the Urban-Rural Divide
Creative Solutions Blend Incentives, Technology and
Governance
Lesson 1: System
Know urban-rural system and its
boundaries
Lesson II: Accounting
Accounting underpins incentives
to track water and financial flows
Lesson III: Incentives
Move from compensation to
sharing benefits for the region,
not (only) the individual
Lesson IV: Governance
Inclusion and transparency delay
agreements, but pre-empt
problems – getting the balance
right

7. The Paradox of Incentives
Scaling Up Hinges on Coordination
Grafton, Q. and S. Wheeler, 2018, in press. Economics of Water Recovery in the Murray-
Darling Basin, Australia. Annual Review of Resource Economics.
Investment in
basin
accounting
and
governance
underpins
growth in
trade

8. 1. Urbanisation intensifies competition, and
interdependence
Drivers clear, but urban-rural linkages often overlooked
2. Incentives can move past zero-sum by sharing benefits
Hinges on underpinning infrastructure, accounting and
governance.
3. Scaling up requires coordination without crowding out
Putting subsidiarity into practice may require complementary
institutions to stimulate local initiatives and build capacity
Summary
Contact: Dr. Dustin E. Garrick
dustin.garrick@ouce.ox.ac.uk