# Seyedali Ohabyazdi

Utilizing Economic Tools for Improving Water Efficiency, Case Study: Zayanderoud Basin

Increasing the water demands, the costs of water supply, and decreasing the water resources, persuade the governments to find the ways for improving the water use efficiency and making equilibrium between demand and supply water. The Water demand in agricultural sector is about 90% of total water demand in Iran. The Water demands management is a direct way to improve the water efficiency and water value. It is essential for the water resources management to establish regulations which leads the consumer for improving the water efficiency and decreasing the water demands. One of the instruments for water demand management is the economic instruments (EIs). The economic instruments consist of the fines, the taxes, the subvention, the pricing or the development of the water markets. Water pricing is used to control the water demand and restore the investment cost. If the price of water to be properly informed, this can be used to help minimize wastage, ensure efficient allocation, and provide incentives for the development of water-efficient technologies. In this research, the first approach is considered to develop an optimization model for finding the crop pattern configuration and the water allocation and to estimate the economic value of water for agricultural sector. The objective function of optimization model is maximizing the net benefit of crops selling and the crops fixed costs. In order to estimate the economic value of water, the combination of the mathematical programming and the production functions is used. Because of the non-linear and complex objective function of the model and the large number of the decision variables, the genetic algorithm was used to solve the optimization model. The comparison of the results shows that the optimal model and the current crop pattern leads to yield the 2.1 times net benefit rather than the current condition. Also for estimating the economic value of water in industrial sector, another optimization model was developed based on the production functions. The results of the industrial model are shown that the economic value of water for the industrial is 140 times more than the agricultural sector. Then two scenarios were developed. In the first scenario, it is assumed that the water is allocated to the different sectors (agricultural, industrial and domestic) similar to the current schemes with the current irrigation efficiency for the agricultural sector. Also in the second scenario it is assumed that for increasing the water efficiency, the efficient irrigation technologies are subsidized to the agricultural sector. For restoring the subsidy, the price of water gradually increases in 10-year period. The result showed that the net benefit at the second scenario is about 24939 Milliard Rials and it is 1.8 times more than the first scenario. Although in the second scenario, the price of water increased, but because of the improving the crop of yield, the income is promoted which leads to increasing the price of water. The optimization model allocates the range of 80 to 100 percents of water demands of agricultural sector in second scenario. Finally two indices are defined including the reliability and dependence to the groundwater. By calculating the indices, the second scenario is selected as the best scenario.

**Key words:**

** **Economic instruments, Water efficiency, Genetic algorithm, Economic value of water, Optimization.