The interdisciplinary nature of the planning and management of complex water resources systems requires methods that integrate the technical, economic, environmental, social and legal aspects into a comprehensive framework that allows the development of efficient and sustainable water management strategies. The Water Framework Directive 2000/60/EC (WFD) recommend that, in a river basin-scale, the pricing politics have to take into account the principle of recovery of costs and the economic sustainability of the water uses. Nevertheless the cost allocation methods currently adopted in Italy do not take into account the user's willingness to pay and, frequently, they do not permit the total costs recovering. So there is the necessity of a new approach including these requirement when defining water rates which could be applied overall in the Mediterranean Region. In this article we present a methodology to allocate water service costs in a water resource system among different users that try to fulfil the WFD requirements. The methodology is based on the Cooperative Game Theory (CGT) techniques and the definition of the related characteristic function using a mathematical optimization approach. The CGT provides the necessary instruments to analyze situations requiring the search of a cost sharing. The CGT approach can give solutions that should be efficient, fair and it has to provide the appropriate incentives among the involved parts. Therefore, the cost allocation in the water system has been valued as a game in which it is necessary to determine the right payoff to be assigned to the different players, which represent in our case the water users. To apply the CGT principles in a water resources system is necessary the definition of characteristic function; in this paper we used of the optimization model WARGI-Opt . The game solutions set is represented by the so-called “core”. It represents the area of the admissible cost allocation values and, through this, it is possible to supply the boundaries values of cost for every player. Inside the core there are all the allocations which satisfy the principles of equity, fairness, justice, efficiency and which guarantee the costs recovery. The core of a cooperative game can represent a useful instrument to define or to adjust water rates. Moreover it can be used as a valid support in the management of the water resources for the achievement of the economic analysis required by the WFD. The methodology was applied to a multi reservoir and multi-demand water system in Sardinia (Italy).
Water costs allocation in complex systems using a cooperative game theory approach
SECHI, GIOVANNI MARIA;ZUCCA, RICCARDO;ZUDDAS, PAOLA
2011-01-01
Abstract
The interdisciplinary nature of the planning and management of complex water resources systems requires methods that integrate the technical, economic, environmental, social and legal aspects into a comprehensive framework that allows the development of efficient and sustainable water management strategies. The Water Framework Directive 2000/60/EC (WFD) recommend that, in a river basin-scale, the pricing politics have to take into account the principle of recovery of costs and the economic sustainability of the water uses. Nevertheless the cost allocation methods currently adopted in Italy do not take into account the user's willingness to pay and, frequently, they do not permit the total costs recovering. So there is the necessity of a new approach including these requirement when defining water rates which could be applied overall in the Mediterranean Region. In this article we present a methodology to allocate water service costs in a water resource system among different users that try to fulfil the WFD requirements. The methodology is based on the Cooperative Game Theory (CGT) techniques and the definition of the related characteristic function using a mathematical optimization approach. The CGT provides the necessary instruments to analyze situations requiring the search of a cost sharing. The CGT approach can give solutions that should be efficient, fair and it has to provide the appropriate incentives among the involved parts. Therefore, the cost allocation in the water system has been valued as a game in which it is necessary to determine the right payoff to be assigned to the different players, which represent in our case the water users. To apply the CGT principles in a water resources system is necessary the definition of characteristic function; in this paper we used of the optimization model WARGI-Opt . The game solutions set is represented by the so-called “core”. It represents the area of the admissible cost allocation values and, through this, it is possible to supply the boundaries values of cost for every player. Inside the core there are all the allocations which satisfy the principles of equity, fairness, justice, efficiency and which guarantee the costs recovery. The core of a cooperative game can represent a useful instrument to define or to adjust water rates. Moreover it can be used as a valid support in the management of the water resources for the achievement of the economic analysis required by the WFD. The methodology was applied to a multi reservoir and multi-demand water system in Sardinia (Italy).
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