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[Natural resources’ policies in Latin America are rarely long-term, consistent and power independent. The Argentinian province of Mendoza achieves both characteristics, groundwater management showed flaws with ensuring quality and availability. Energy subsidies for agricultural irrigation have relied too much on a permanent policy, and are subject to political maneuvering whenever their stability is at risk. Following a tripod framework to review the institutional settings of the water-energy nexus, we review the policy effectiveness and analyze policy outcomes in light of the nexus. Although the majority of policy tools have become demand-oriented during the last 20 years, they do not provide consistent economic incentives for agricultural producers when considering environmental degradation of groundwater resources. The economic tools designed for the agricultural sector aimed to sustain profit levels by influencing the market conditions rather than improving farm-level efficiency. Under water scarcity periods and subsidized energy, we observed changes in grapevine prices and groundwater table levels that suggest a relationship with the exploitation of the Carrizal aquifer. To explore the resource in a sustainable manner and further save energy and money, subsidy effectiveness should be reconsidered. Policy-makers could gradually shift the annual budget from energy subsidy into optimization programs for water and energy, which would upgrade resource management and stimulate sustainable development.]
Published: Nov 11, 2020
Keywords: Water-energy nexus; Resources policies; Water scarcity; Groundwater depletion; Grapevine production
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