A Deterministic Smart Market Model for Ground Water

Type of content
Journal Article
Thesis discipline
Degree name
Publisher
University of Canterbury. Civil and Natural Resources Engineering
University of Canterbury. Management
Journal Title
Journal ISSN
Volume Title
Language
Date
2009
Authors
Raffensperger, J. F.
Milke, M.W.
Read, E.G.
Abstract

Efficient management of water requires balancing environmental needs, externality considerations, and economic efficiency. Toward that end, this paper presents a deterministic linear program that could be used to operate a smart spot market for groundwater. The market design uses the existing hydrological programs MODFLOW and GWM along with standard linear programming methods. In principle, a market could be set up anywhere that a MODFLOW model is available. The market design has parallels to markets in the electricity and gas sectors, which we discuss. We present a case study with notional bids for Marlborough, New Zealand. Our approach would reduce transaction costs for a water market, reduce users’ risk, and increase the reliability of environmental flows. We discuss a number of cautions and limitations to the model and recommend further work on introducing a stochastic framework to the model.

Description
Citation
Raffensperger, J. F., Milke, M.W., Read, E.G. (2009) A Deterministic Smart Market Model for Ground Water. Operations Research, 57(6), pp. 1333-1346.
Keywords
Games/group decisions: bidding/auctions. Environment. Natural resources: water resources
Ngā upoko tukutuku/Māori subject headings
ANZSRC fields of research
Rights