Incentives to adopt irrigation water saving measures for wetlands preservation: An integrated basin scale analysis

Preserving natural wetlands is a growing challenge as the world faces increased demand for water. Drought, climate change and growing demands by users aggravate the issue. The conflict between irrigated agriculture and wetland services presents a classic case of competition. This paper examines an institutional mechanism that offers an incentive to farmers to adopt water conservation measures, which in turn could reduce overall water use in irrigated agriculture within a selected basin. Reduced water demands could provide the additional water needed for wetland preservation. We present an analytical empirical model implemented through the development of an integrated basin framework, in which least-cost measures for securing environmental flows to sustain wetlands are examined for the Zayandeh-Rud River Basin of central Iran. To test this idea, two policies – one with and one without an incentive – are analyzed: (a) reduced agricultural diversions without a water conservation subsidy, and (b) reduced agricultural diversions with a water conservation subsidy. The policies are evaluated against a background of two alternative water supply scenarios over a 10-year period. Results reveal that a water conservation subsidy can provide incentives for farmers to shift out of flood irrigation and bring more land into production by adopting water-saving irrigation technologies. The policy increases crop yields, raises profitability of farming, and increases the shadow price of water. Although the conservation subsidy policy incurs a financial cost to the taxpayer, it could be politically and economically attractive for both irrigators and environmental stakeholders. Results open the door for further examination of policy measures to preserve wetlands.