FEEM working papers "Note di lavoro" series
2014 .062

An Integrated Risk Assessment Model for the Implementation of Drought Insurance Markets in Spain


Autori: Carlos Dionisio Pérez Blanco, Carlos Mario Gómez Gómez
Serie: Climate Change and Sustainable Development
Editor: Carlo Carraro
Tipo: Journal
Parole chiave: Drought Insurance, Stochastic Models, Groundwater, Agriculture, Drought Contingency Plan
Numero JEL: Q5, Q25
JEL: Water Policy
Data: 10/2013

Abstract

Water is a key input in the production of many goods and services and under certain conditions can become a critical limiting factor with significant impacts on regional development. This is the case of many agricultural European Mediterranean basins, where water deficit during drought events is partially covered by illegal abstractions, mostly from aquifers, which are tolerated by the authorities. Groundwater overexploitation for irrigation has created in these areas an unprecedented environmental catastrophe that threatens ecosystems sustainability, urban water supply and the current model of development. Market-based drought insurance systems have the potential to introduce the necessary incentives to reduce overexploitation during drought events and remove the high costs of the drought indemnity paid by the government. This paper develops a methodology to obtain the optimum risk premium based on concatenated stochastic models. The methodology is applied to the agricultural district of Campo de Cartagena (Segura River Basin, Spain). Results show that the prices in a hypothetic competitive private drought insurance market would be reasonable and the expected environmental outcomes significant.

***

Suggested citation: Pérez Blanco Carlos Dionisio and Gómez Gómez Carlos Mario, Insuring water: a practical risk management option in water-scarce and drought prone regions?, Water Policy, 2013  doi:10.2166/wp.2013.131, http://www.iwaponline.com/wp/up/wp2013131.htm

Download file
Scarica il file PDF
links
Link

FEEM Newsletter

Iscriviti per rimanere aggiornato.

I Suoi dati saranno trattati dalla Fondazione Eni Enrico Mattei. – Titolare del trattamento – per ricevere via posta elettronica la newsletter della Fondazione. Il conferimento dell’indirizzo e-mail è necessario alla fornitura del servizio. La invitiamo a consultare la Privacy Policy per ottenere maggiori informazioni a tutela dei Suoi diritti.

Questo Sito utilizza cookie tecnici e analytics, nonché consente l’invio di cookie di profilazione di terze parti.
Chiudendo questo banner o comunque proseguendo la navigazione sul Sito manifesti il tuo consenso all’uso dei cookie. Per ulteriori informazioni e per esprimere scelte selettive in ordine all’uso dei cookie vedi la   Cookie PolicyOk