Socio-hydrological agent-based modelling for analysing the impacts of supply enhancement strategies on the cap-and-trade scheme

Abstract

ABSTRACT An agent-based model (ABM) is developed to explore the socio-hydrological and economic impacts of a water transfer project, as a supply enhancement strategy, on the cap-and-trade scheme, as a demand-side management practice, in Rafsanjan Plain, Iran. The modelling scheme benefits from a distributed groundwater model coupled with a socio-economic ABM to explore the social and economic impacts of the proposed supply enhancement and demand management strategies. The main goal of the integrated model is to investigate how the supply enhancement strategies and the cap-and-trade policy can bring about more favourable hydrological, social, and economic results in the recipient basin. Findings indicate that integration of the supply augmentation and the cap-and-trade policy can facilitate the emergence of collective action in the farmer society. It is shown that the combination of these two policies, when implemented to mitigate water scarcity, reduces economic costs incurred on both farmers and the government and brings about more favourable socio-hydrological outcomes.