Journal of Environmental Management 332 (2023) 117409

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Journal of Environmental Management

journal homepage: www.elsevier.com/locate/jenvman

Research article

A market-based mechanism for long-term groundwater management using

remotely sensed data
Safoura Safari a, Soroush Sharghi a, Reza Kerachian a, *, Hamideh Noory b
a
School of Civil Engineering, College of Engineering, University of Tehran, Tehran, Iran
b
Department of Irrigation and Reclamation Engineering, College of Agriculture and Natural Resources, University of Tehran, Karaj, Iran

A R T I C L E I N F O A B S T R A C T

Keywords: Groundwater markets improve the agricultural economy by transferring water entitlements from low-efficient
Smart groundwater market users to high-efficient ones to maximize productivity. Aiming at developing an efficient groundwater market,
Groundwater management the environmental effects of the market mechanism should be assessed, and a reliable method for monitoring
Groundwater entitlement
water consumption needs to be employed. Toward this end, this paper proposes three annual smart groundwater
Remote sensing
market mechanisms to maximize water net benefits, minimize groundwater withdrawal, and precisely measure
METRIC
SEBAL water consumption in agricultural fields. To guarantee the aquifer’s safe yield in each mechanism, a groundwater
simulation model (i.e., Groundwater Modeling System (GMS)) is used to control groundwater table drawdown at
the end of the planning horizon. In addition, the fields’ evapotranspiration (ET) is estimated using Surface Energy
Balance Algorithm for Land (SEBAL) and Mapping Evapo Transpiration at high Resolution with Internalized
Calibration (METRIC) algorithm to measure the net groundwater consumption during the market. In this regard,
we evaluated the algorithms’ performances using observed data from a local lysimeter. They are applied to the
Nough plain in Iran to assess the effectiveness of the proposed market framework. The findings illustrate their
efficiency in recovering approximately 80% (23.33 million cubic meters (MCM)) of groundwater loss due to
overexploitation in the study area and increasing the users’ annual benefits by 10.6% compared to the non-
market condition. In addition, results imply that the METRIC model approximates daily crop ET with a higher
accuracy level than the SEBAL model with RMSE, MAE, and Percentage Error of 0.37 mm/day, 0.32 mm/day,
and 14.92%, respectively. This research revealed that the proposed market framework is a powerful tool for
reallocating water entitlements and increasing water productivity in arid and semi-arid regions.

1. Introduction
Water scarcity is recognized as one of the most challenging problems
societies are currently encountering. Discounting the water of polar ice
caps, 90% of fresh water is supplied by groundwater resources, making
them the primary buffer against drought. In recent years, careful mea­
surements revealed that the groundwater tables in all continents have
dropped by one to 3 m per year, depleting groundwater resources and
threatening regional water availability (Morris et al., 2003). In response
to groundwater scarcity, Mukherjee and Singh (2020) delineated
groundwater potential zones in agricultural fields in eastern India using
Geographic Information System (GIS) and Analytical Hierarchical Pro­
cess (AHP). Their findings implied that almost 64% of areas are classi­
fied as moderate and poor groundwater potential zones, leading to
groundwater availability crises. They recommended rainwater
harvesting and revised crop patterns to address these crises. Mahjouri
and Ardestani (2010), Jafarzadegan et al. (2013) and Parsapour-Mog­
haddam et al. (2015) attempted to address the same problem in the
Rafsnajan aquifer in Iran by proposing game theoretic approaches for
inter-basin water resources allocation and groundwater management.
Their proposed model has been proved to be an optimal approach for
inter-basin water transfer to improve groundwater scarcity in the Raf­
sanjan aquifer.
Water markets play an important role in addressing water supply
sustainability, water conservation, and raising social awareness of actual
water value (Aghaie et al., 2020; Alarcón and Juana, 2016). The water
market framework enables water holders to reallocate their available
water from low-efficient to high-efficient activities (Du et al., 2021).
Numerous studies have been conducted to assess groundwater market
performance in different watersheds to 1) give rise to the economic

* Corresponding author.
E-mail addresses: safoura.safari@ut.ac.ir (S. Safari), sharghi@ut.ac.ir (S. Sharghi), kerachian@ut.ac.ir (R. Kerachian), hnoory@ut.ac.ir (H. Noory).

https://doi.org/10.1016/j.jenvman.2023.117409
Received 8 September 2022; Received in revised form 23 January 2023; Accepted 27 January 2023
Available online 4 February 2023
0301-4797/© 2023 Elsevier Ltd. All rights reserved.
S. Safari et al.
efficiency of water consumption (Du et al., 2017; Aghaie et al., 2020;
Sharghi and Kerachian, 2022a, 2022b) and 2) attenuate groundwater
depletion (Iftekhar et al., 2013; Sharghi and Kerachian, 2022a, 2022b,
Moghaddasi et al., 2022). In what follows, some recent studies about
groundwater markets are reviewed.
Khan and Brown (2019) developed a groundwater cap-and-trade
framework that measures streamflow depletion effects using hydrolog­
ical models. Their findings acquired from groundwater market imple­
mentation in the Ogallala aquifer in the US implied that this framework
improves the economic payoff of water use and reduces environmental
violations. To fill out the gap in Khan and Brown (2019) research,
Aghaie et al. (2020) developed an agent-based market model to address
drastic groundwater drawdown while increasing water users’ benefits in
the Rafsanjan aquifer in Iran. They employed the water buyback pro­
gram to address drastic groundwater drawdown, which has been proven
to be more appealing since it does not cap the users’ current water en­
titlements. However, the water buyback program highly depends on the
government’s financial support, which has been addressed in research
conducted by Gutiérrez-Martín et al. (2020). They proposed a
self-financed water bank framework through which
monopsony-monopoly setting is operated to recover water resources by
balancing the budget. They evaluated the performance of the water bank
in the Guadalquivir River Basin by designing several scenarios with
different objectives, considering the social and environmental water
demands during drought seasons. The results illustrated that the pro­
posed water bank could recover 5.8%–10.4% of shared water resources’
carrying capacity without external funds.
In another research, Sharghi and Kerachian (2022a) devised a smart
market framework to restore groundwater storage and increase agri­
cultural fields’ economic gain in the Rafsanjan aquifer in Iran. They
showed that a groundwater market increases average water productivity
by 25% while considering environmental constraints. Nonetheless, the
introduced market framework restricted users’ historical entitlements,
which may reduce users’ economic incentives to participate.
Nevertheless, previous studies lack in proposing a firm structure for
the bidding process, introducing a strong measurement approach to
control groundwater consumption, and evaluating the uncertainty of
available water due to unauthorized water withdrawal.
Most market frameworks hire measuring instruments to quantify
water use, including locks, gates, and smart water meters. In the current
research, to overcome limitations regarding the mentioned instruments,
satellite imagery data were employed to measure water use by esti­
mating crop evapotranspiration (ET), which reflects real water con­
sumption. Abundant investigations have been carried out to establish
algorithms for calculating ET using satellite data. Bastiaanssen et al.
(1998) initiated attempts to develop energy balance models. They pre­
sented the Surface Energy Balance Algorithm for Land (SEBAL) for a
mountainous region in Idaho, USA. Later on, to adjust SEBAL perfor­
mance, Allen et al. (2005a,b) introduced the Mapping Evapo Transpi­
ration at high Resolution with Internalized Calibration (METRIC)
algorithm as an image processing tool to detect actual crop ET using
surface energy budget. Allen et al. (2007) revised the METRIC algorithm
to promote its accuracy (Losgedaragh and Rahimzadegan, 2018).
As the energy balance algorithms hire local stationary data and are
sensitive to climatic factors, research has been carried out (e.g., Ramos
et al., 2009; Karimi et al., 2012; Rahimzadegan and Janani, 2019;
Badiehneshin et al., 2019; Sane et al., 2020; Nema et al., 2020; Ali et al.,
2021) to evaluate their performance in different climate conditions.
Ramos et al. (2009) estimated ET for the cultivated area of maize and
wheat in the Ebro plain in Spain employing the SEBAL algorithm. They
evaluated the results using lysimeter data and ET calculated by the
Penman-Monteith method. Their findings exhibited a 20% error in ET
values estimated by SEBAL and Penman-Monteith methods.
In another study by Ruhoff et al. (2012), ET values of sugarcane and
savannah cultivars in Brazil are calculated using the SEBAL model and
MODIS imagery data. The results showed R2 of 0.76 and 0.66 for the
Journal of Environmental Management 332 (2023) 117409
mentioned cultivars compared to ET values obtained from the eddy
correlation system.
Rahimzadegan and Janani (2019) investigated the performance of
the SEBAL model by estimating pistachio ET in Semnan plain in Iran.
They used field measurement data from Intelligent Meteorological In­
strument (iMetos-Pessl) to evaluate SEBAL performance in arid regions.
They computed the coefficient of determination and Root Mean Square
Error (RMSE) for the actual daily ET of pistachio plants as 0.8 and 2.5
mm, respectively. In the research carried out by Badiehneshin et al.
(2019), water supply statuses of different stages of pistachio plant
growth were detected. They calculated the actual pistachio ET for the
Sirjan plain, Iran, using the SEBAL algorithm and Landsat 8 OLI imagery
data. The results were validated with lysimeter data and revealed the
20% (0.6 mm/day) error in SEBAL performance.
In another research conducted by Nema et al. (2020), the METRIC
algorithm was applied over mountainous areas of Uttarakhand in India.
The ET values obtained by METRIC implementation are evaluated by the
Penman-Monteith equation, indicating that the METRIC model under­
estimated ET values by 20.9% and revealed the averaged MAE of 0.95
a mm/day. They incorporated a modification into the METRIC model to
better represent the rainfall effects on the ET process and reduced the
MAE and underestimation rate to 0.44 mm/day and 8.4%.
Ali et al. (2021) evaluated the performance of SEBAL and METRIC
algorithms in hyper-arid conditions in Oman. The ET values obtained by
SEBAL and METRIC models are validated by field measurements of sap
flow and the Penman-Monteith model. According to their results, the
METRIC model showed the highest correlation of R2 = 0.83.
According to previous research, there is a gap in developing efficient
water markets for sustaining groundwater resources while enhancing
users’ economic conditions. In this paper, we attempted to reallocate
available groundwater to address groundwater depletion and raise the
water use efficacy in agricultural fields. Toward this end, a long-term
groundwater market framework was designed for arid and semi-arid
regions, operating through three mechanisms that employ two ap­
proaches: 1) gradually decreasing groundwater withdrawal permits and
2) purchasing groundwater entitlements. The bidding process and its
impacts on farmers’ behavior in the market performance were also taken
into account by proposing a method to value various quantities of
groundwater entitlements based on users’ benefit functions in different
crop-growing seasons. A hydrological model was also developed to
assess the impacts of the market operation on groundwater storage.
Although it very important to propose an efficient method for pre­
cisely monitoring users’ water consumption in water markets, it has
been disregarded in previous studies. In the presented research, we
introduced a precise approach to measuring groundwater withdrawal of
market participants using remotely sensed data and two surface energy
balance algorithms (i.e., SEBAL and METRIC). The proposed market also
measured the uncertainty of available water due to unauthorized water
withdrawal during market implementation.
The application of the proposed market framework on the Rafsanjan
aquifer in Iran was evaluated. As almost 90% of groundwater is
consumed by the agricultural sector in the selected study area, the
proposed market has only focused on agriculture, and industrial and
domestic water users were not included in the trading system.
2. Methodology
The presented research attempts to propose a groundwater trading
framework that integrates groundwater resource engineering, agricul­
tural management, and economic perspective in arid and semi-arid
areas. Fig. 1 illustrates a flowchart of the proposed methodology. In
what follows, the subsections of the flowchart are described in detail.
3. Data collection
GIS layers of the aquifer’s main features, including the span and
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S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 1. A flowchart outlining the proposed smart groundwater market framework.

boundaries of areas under cultivation and rural areas, the zoning maps
of water salinity (EC), pH, crop yield, and wells’ location, were used to
determine the appropriate region for groundwater market imple­
mentation. Moreover, estimated data on the farm’s annual yield and net
benefits were needed to value groundwater entitlements (bidding
process). Water prices were derived from yield functions developed for
the specific crop in the study area.
Hydrological data, piezometer, aquifer bedrock, well discharge, and
topography data were gathered monthly to calibrate the groundwater
model Meanwhile, the observed crop ET data of the local lysimeter and

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S. Safari et al. Journal of Environmental Management 332 (2023) 117409

meteorological data (i.e., minimum and maximum daily temperature,

daylight hours, and relative humidity) were collected to evaluate the
performance of the SEBAL and METRIC models. Table 1 outlines the
required data for different sections of the current research.

4. Bidding process

A bid is a firm offer from water holders to exchange a certain

quantity of their groundwater entitlements with others at a specific price
(Raffensperger and Milke, 2017). In the presented smart groundwater
market, unlike the traditional water markets (e.g., Du et al., 2017; Khan
and Brown, 2019, and Aghaie et al., 2020), groundwater is not traded
only at a fixed price; instead, farmers propose several prices for different
quantities of their available groundwater. The mentioned groundwater
quantities are called bid quantities, and farmers determine their volume
according to their crop water demands. Usually, the initial bid quantities Fig. 2. The structure of a bid package diagram offered by a water holder.
are highly valued since there are more demands to provide farms with
certain irrigation water they need to survive. Estimated prices per vol­ selected crop type (Raffensperger and Milke, 2017). In addition, the
ume of water are gathered for each farmer’s groundwater entitlement to traded water would not be physically transferred between users. Instead,
set their “bid package” diagrams (Fig. 2). Bid packages are offered to the users extract their RGEs, from pumping wells they have been extracted
market manager to be traded between water holders during the market. before. A central manager operates the market and determines the
traded bid quantities and prices for different trading seasons using the
5. Groundwater market structure optimization model during one annual auction. The gross pool model
can be formulated as follows:
5.1. Environmental agent ∑ ∑
Z = Maximaze Bidpriceb,t,i bidb,t,i (1)
bids bperiod t
An environmental agent is considered in the proposed market
∑
framework to prevent depleting groundwater resources as well as boost qi,t = bidb,i,t (2)
users’ annual benefits. The environmental agent purchases specific bid bids b
quantities of users and prevents them from being discharged to atten­
uate the groundwater table drawdown. After offering bid packages to bidb,i,t < BidQtyb,i,t (3)
the market manager, the environmental agent identifies the least-valued ∑
bid quantities, which are no longer profitable for farmers, and purchases Lt < qi,t < Wt for each period t (4)
them as much as its budget permits. Its budget is provided by collecting user i

transaction costs market participants are obliged to pay during the Where, Bidpriceb,t,i and bidb,t,i are the price that user i offers for bid
market. The market manager determines the transaction cost as a certain quantity b in season t and the water quantity associated with bid
percentage of the traded water’s net value for both sellers and buyers. quantity b submitted by user i in season t, respectively. Equation (1)
expresses the linear optimization model’s objective function, which
5.2. Gross pool model maximizes farmers’ annual profits from selling crops. Equation (2) im­
plies the first constraint of this model. qi,t represents the total reallocated
The proposed smart groundwater market works centered on the water assigned to user i in season t, which equals the aggregation of bid
gross pool model. Through this model, users bid for their initial quantities assigned to user i in season t. Equation (3) restricts the water
groundwater entitlements (IGEs) and are assigned the reallocated assigned to each bid quantity to be less than the maximum water defined
groundwater entitlements (RGEs) they wish to have (Raffensperger and for that block (BidQtyb,i,t ). The last constraint (Equation (4)) prevents
Milke, 2017). A multi-agent optimization model is applied to estimate users from groundwater overexploitation. The right side of the
users’ RGEs and trading prices, aiming to maximize users’ annual constraint suggests that the users’ accumulated reallocated water (qi,t )
financial gain while considering the maximum available groundwater should not exceed the available water in the region that farmers are
and minimum irrigation water restrictions for the study area and legally allowed to extract in each season (Wt ). In addition, the left side of
this constraint is stated that the total reallocated water needs to be more
than the minimum irrigation water in different seasons (Lt ).
Table 1
Required data for different sections of the current research. The traded bid quantities, which farmers should sell or purchase, are
computed by comparing their IGEs to RGEs. IGEs are issued by a related
Market region Bidding Groundwater ET calculation
organization and historically extracted by water holders, while RGEs are
identification simulation
estimated through market mechanisms. The optimization model fixes
Rural borders Electric Recorded Landsat imagery
the Lagrange multipliers as the actual prices (i.e., Shadow prices) at
(GIS layers) conductivity (EC) Hydraulic data
(μsi/cm) conductivity data which water entitlements are traded in each trading season. Shadow
Areas under Farmers’ area Observed bedrock Lysimeter data price (dual price) will raise the user’s annual benefit if the offered water
cultivation (GIS under cultivation elevation data price rises as much as one unit.
layers) (GIS layers) It should be considered that users’ annual profit must rise by
Crop yield Irrigation demand Observed Temperature
participating in the groundwater market. Therefore, financially lost
(Zoning map) (ET) (Yield data) Piezometer data (Min, Max,
Mean) users should be removed from the market model. To accomplish this
EC (Zoning map) Recorded Well Relative goal, users’ total benefits before joining the market (pre-market benefit)
discharge data humidity (RH) are calculated using their benefit functions, which reflect their net
data
benefit considering the cost of pumping groundwater, improving soil
pH (Zoning map) Topography data Daylight hour
Wind speed (Ux) productivity, and maintaining agricultural facilities (Sharghi and

4
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Kerachian, 2022a). In the meantime, farmers’ net annual benefit after √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅
√∑
joining the market (post-market benefit) is calculated considering 1) the √n
√ (Obsi − Esti )2
net annual benefit of selling agricultural products, 2) the benefit ac­ √
RMSE = i=1 (7)
quired by selling bid quantities to the environmental agent (for farmers n
who come to trade with the environmental agent), 3) the net profit ac­ √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅
( )2 ( )2
quired by selling bid quantities to other farmers for seller agents and the σ Est μEst
KGE = 1 − (r − 1)2 + − 1 + − 1 (8)
net financial cost incurred by buyer agents for purchasing bid quantities, σObs μObs
and 4) the transaction cost which all participants are required to pay to
the market manager. Cov(Obs, Est), Var(Obs), and Var(Est) denote covariance of observed
and estimated ET, the variance of observed ET, and the variance of
estimated ET. KGE index is a goodness-of-fit index developed by Gupta
5.3. Groundwater market mechanisms et al. (2009) to provide an interesting decomposition of the
Nash-Sutcliffe measure in hydrological modeling. In KGE’s formulation,
Three mechanisms for running a long-term market are proposed to σ Est , σ Obs , μEst , and μObs are the standard deviation and mean value of
adjust the users’ groundwater abstraction to reach aquifer reliability. estimated and observed ET. The term “r" is the linear correlation be­
The “first mechanism” suggests that water holders must permanently tween observed and estimated ET.
decrease their groundwater abstraction at the beginning of each auction
(year) until the available water of sub-regions equals the aquifer’s safe
7. Uncertainty evaluation
yield at the final auction (end of the planning horizon). Based on this
mechanism, the market runs yearly to reallocate agents’ modified IGEs
Since the total groundwater withdrawal must remain constant, un­
to recoup the economic loss they incurred due to capping their available
authorized groundwater withdrawal that cannot be distinguished due to
water. In this mechanism, groundwater restoration is guaranteed as long
the possible errors associated with applying SEBAL and METRIC models
as agents do not violate their assigned RGEs during the market.
must be taken into account. SEBAL and METRIC algorithms induce
In the “second mechanism”, users’ IGEs are not capped. Thus, the
specific errors in calculating crop ET, generating uncertainty regarding
region’s total available water for irrigation remains constant, and the
the water consumption in trading seasons and, consequently, the
long-term groundwater market is run based on the same available water
available water for the following seasons. A Monte-Carlo simulation is
at each auction. In this mechanism, the environmental agent purchases
employed to capture uncertainty and model its possible effects on
the most worthless bid quantities based on users’ bid packages and
groundwater market outputs, including users’ available water, shadow
prevents them from being discharged. In the “third mechanism”, the
prices, and users’ total benefits.
market is designed to address groundwater scarcity issues over a specific
planning horizon by combining two previous mechanisms. Thus, users’
IGEs are gradually reduced at each auction until the total available 8. Case study
water equals the aquifer’s safe yield in the final auction. In addition, the
environmental agent is active during market execution to purchase bid Rafsanjan plain is expanded in Kerman, southeast Iran. Its area spans
quantities in favor of environmental purposes. between 54◦ 52′ to 56◦ 34′ longitude and 29◦ 51′ to 30◦ 31′ latitude and
covers an area of 1,242,100 ha. Topography maps suggest that Rafsan­
jan plain’s elevation varies from 3443 m to 1400 m above sea level in
6. Groundwater market monitoring
highlands and lowlands. The annual average rainfall precipitation in
Rafsanjan plain varies between 60 mm in the lowlands and 120 mm in
Numerous studies have revealed that direct methods (e.g., measuring
the highlands. The average evapotranspiration height is three m/year,
water withdrawal) (Kenny, 2004) and indirect methods (e.g., agrarian
supplying water demands of about 110,000 ha of pistachio orchards.
statistics and water balances) (Ahmad et al., 2005) of quantifying
This region is classified as an arid region based on the DoMarton climate
groundwater withdrawal have failed to satisfy the demands of high
classification method. Thus, its weather is warm and dry in summers and
precision and low cost of implementation and maintenance (Castaño
cold in winters with low relative humidity (Rahnama and Zamzam,
et al., 2010). In addition, in agricultural consumption, in case the flood
2013). Rafsanjan aquifer is the primary source of supplying water de­
irrigation approach is applied, the actual water consumed by crops is not
mands for domestic, agricultural, and industrial sectors in Rafsanjan
equal to irrigation water. In other words, a noticeable amount of irri­
territory. Nearly 90% of groundwater is allocated to agricultural de­
gated water is lost due to infiltration. Therefore, actual amounts of water
mands. Also, 4% and 6% of groundwater withdrawal are allocated to
used by crops are reflected by the term “evapotranspiration".
domestic and industrial sectors (IWRMC, 2011). Based on recorded data
Hence, the presented research aims to hire remote sensing technol­
from the Iran Water Resources Management Company (IWRMC) report
ogy and satellite imagery data to precisely measure the groundwater
in, 2016, groundwater overdraft in this area led to a groundwater table
consumed by the market participants using SEBAL and METRIC algo­
drawdown of more than 70 m over nearly 40 years. Currently, it is being
rithms. Details of SEBAL and METRIC algorithms are presented in the
dropped down to 0.8 m/year. The study area’s general water and annual
online supplementary material. Therefore, it is necessary to assess the
groundwater budgets are illustrated in the online supplementary ma­
performance of these models in the selected study area by comparing the
terial (Tables S1 and S2) (IWRMC, 2011).
estimated crop ET to the existing observed ET.
The northwestern part of Rafsanjan plain is called Nough plain,
To this end, the coefficient of determination (R2), Mean Absolute
including three rural districts: Ferdousiyeh, Esmaiel Abad, and Nemat
Error (MAE), Kling-Gupta Efficiency (KGE), and Root Mean Square Error
Abad (Bahraman). Nough plain covers 82,260 ha with 336 registered
(RMSE) are computed using estimated and observed ET and Equations
drilled wells and 19 piezometer wells. Over the past 50 years, the total
(5)–(8):
groundwater overdraft in this region, which is 240 MCM more than the
{ }2
Cov(Obs, Est) aquifer’s safe yield, has resulted in unfavorable consequences, like
R2 = √̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅̅ (5) increasing depth to the water table in pumping wells, land subsidence of
Var(Obs).Var(Est)
nearly 0.3 m/year, and drastic rise in water salinity (EC) (Abed-Elmdoust
∑
n and Kerachian, 2013). All of the mentioned consequences have
|Obsi − Esti | adversely affected farmers’ crop yield and created serious concerns over
MAE = i=1 (6) aquifer reliability as the primary source of the water supply in the
n
Rafsanjan region. Fig. 3 demonstrates the Rafsanjan and Nough plain in

5
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 3. The location of the Rafsanjan watershed, Nough plain, and pumping wells.

the central area of Iran and the locations of agricultural and piezometer sub-coalition (agent) with different IGE and groundwater quality, which
wells over the Nough plain. several farmers share to irrigate their nearing orchards. Therefore, 20
Regional Water Board Companies (RWBCs) in Iran permanently issue agents, each of which owns one pumping well with a particular IGE,
initial groundwater entitlements for water holders. In Rafsanjan, there participate in the annual groundwater market to be assigned their RGEs
are historical groundwater entitlements for farmers issued by Kerman (Fig. 4 (e)). In Table 2, the main characteristics of agents are listed.
RWBC. Groundwater entitlements permit water holders to pump
groundwater for specific numbers of hours. Ever since groundwater
9.2. Preparing agents’ bid packages
storage has decreased and water quality has extensively varied over
Nough plain, an informal groundwater market has been established
For the next step, agents’ bid packages need to be generated. To this
among water holders in the agricultural sector (Jaghdani and Brümmer
end, pistachio yield functions should be approximated based on agents’
2016). The current research proposes a framework for implementing a
characteristics (Table 2) and IGEs (Online supplementary material,
smart groundwater market to encourage farmers to participate in a
Table S4). In general, the region’s soil and crop types affect annual yield.
formal groundwater market to achieve more profit and promote aquifer
As these variables are similar to all agents in the selected study area and
reliability for future climate conditions.
would not create a noticeable difference in their yields, they are not
included in their yield functions.
9. Results and discussion
The online supplementary material describes the process of devel­
oping annual and seasonal yield functions and extracting agents’ bid
9.1. Specifying potential coalition and sub-coalitions
packages diagram. Seasonal yield functions are obtained for the four
pistachio phenological stages, in accordance with four trading seasons in
Firstly, the boundaries and areas for operating the groundwater
the market framework, regarding restriction of minimum irrigation
market need to be identified. According to Jamali Jaghdani and Brüm­
water of 49, 189, 300, and 65 m3 for the four stages, respectively
mer (2016), in the study area, farmers with higher crop yields and lower
(Table 3). Thus, agents’ bid package diagrams are established for four
water pH and Electrical Conductivity (EC) are motivated to purchase
trading seasons based on the developed seasonal functions.
groundwater entitlements from farmers with lower crop yields and
higher pH and EC. Thus, the selected region should be heterogeneous in
10. Groundwater market mechanisms
mentioned characteristics to enhance the possibility of establishing an
efficient groundwater market with a high rate of water trading. Toward
The proposed groundwater market framework is implemented using
this end, GIS layers of orchards’ pistachio yield, classified into three
three mechanisms over ten years in the study area. The market runs
classes based on their yield rate, and groundwater pH and EC are
yearly (auction interval), and output variables, including traded bid
gathered from existing data and overlaid using the ArcGIS toolbox
quantities and shadow prices, are estimated seasonally, aligned with
(Fig. 4 (a, b, c)). The final map illustrates the range and variety of
four trading seasons. A three-dimensional groundwater model is devel­
mentioned features, classified into nine classes, which equip us with the
oped for the Rafsanjan aquifer using MODFLOW, employing the
information to determine a specific sub-region in the southeast of Nough
graphical user interface GMS to simulate non-uniform groundwater
plain and the north of Esmaiel Abad district for implementing the
table decline. The GMS includes a graphical user interface and some
groundwater market (Fig. 4 (d, e)). This sub-region is heterogeneous in
groundwater simulation codes (e.g., MODFLOW, MT3DMS, etc.)
the main characteristics (i.e., pistachio yield, pH, and EC) based on their
(Hemker and van Elburg, 1990). Recorded data from pumping wells and
different final classes, creating a competitive environment in which
the piezometer’s observed hydraulic head data from 2006 to 2020 are
farmers can trade their IGEs to reap more benefits (Fig. 4 (d)). The
hired to calibrate (using 75% of data) and validate (using 25% of data)
selected heterogeneous sub-region (Coalition) needs to be divided into
the model. Boundary conditions are determined geologically using re­
several homogeneous sub-coalitions (agents) to facilitate the trading
ported data, and the hydraulic conductivity and bedrock data are
process and improve efficiency. Each pumping well is assumed to be a
collected from the Ministry of Pistachio Institute.

6
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 4. Specifying appropriate coalition and sub-coalition: a) classifying orchards based on annual pistachio yield, b) digital data layers of pH and c) groundwater EC
(μsi/cm), d) selecting the potential coalition based on final classification, and e) sub-coalitions (agents).

Simulation results delineate good agreement between observed and
simulated hydraulic head data with Determination Coefficient (DC),
RMSE, and Mean Absolute Residual Error (MARE), equal to 0.9935,
0.92, and 1.86 m, respectively.
The groundwater simulation model is hired to predict groundwater
table fluctuations resulting from extracting agents’ RGEs estimated by
different market mechanisms. Fig. S2 in the online supplementary ma­
terial portrays the structure of the three-dimensional calibrated model.
In the following, three market mechanisms and their performance will
be described.
10.1. The first mechanism
The total annual groundwater withdrawal of the Rafsanjan aquifer is
about 700 MCM, of which 240 MCM is more than the aquifer’s safe yield
(Mahjouri and Ardestani, 2010). Sharghi and Kerachian (2022a) pro­
posed three management scenarios through which users’ groundwater
abstraction is reduced by multiplying the abstraction reduction coeffi­
cient of 0, 0.1, and 0.3. They assessed the Rafsanjan aquifer response to
proposed scenarios by measuring averaged groundwater hydraulic head
obtained from the groundwater simulation model. They suggested that
the aquifer’s safe yield will be achieved if groundwater abstractions are
capped by applying the reduction coefficient of 0.3. Therefore, the
aquifer would be naturally recovered every year without experiencing a
drastic groundwater table drop.
The total available water for the selected study area is 9.72 MCM
(Online supplementary material, Table S4), which needs to be reduced
to 6.8 MCM by applying the abstraction reduction coefficient of 0.3 to

7
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Table 2 collected transaction payments that market participants must pay to

The main characteristics of agents. purchase bid quantities in the next auction. Thus, it does not present in
Well ID Agent ID Area (ha) Averaged EC (μ si/cm) Depth to GW (m) the market during the first auction. The main results of the second
mechanism indicate that shadow prices hardly change during ten years
336 1 100.73 4.92 105
334 2 102.48 5.10 105 of market implementation since the total available groundwater in the
1236 3 74.96 4.99 130 study area is not capped (Fig. 6 (a)). Groundwater withdrawal declines
338 4 66.00 4.42 95 by approximately 1.32 MCM because of the environmental agent’s ac­
337 5 63.39 4.52 105 tion, which is insufficient for groundwater restoration (Fig. 6 (b)). Fig. 6
335 6 69.94 4.80 95
351 7 43.82 4.57 95
(c) implies that agents 1, 3, 4, 5, 9, 11, and 17 are not prompted to
349 8 56.37 4.25 105 engage in the market since they suffer from financial loss due to paying
348 9 62.24 4.32 105 transaction costs. Fig. 6 (d) shows the difference between agents’ pre-
347 10 75.88 4.36 105 and post-market financial income, which is not as considerable as the
340 11 63.56 4.44 105
first mechanism.
346 12 99.07 4.45 100
339 13 33.21 4.49 105 Specifying the amount of transaction cost paid by agents strongly
341 14 24.16 4.45 100 influences the market outputs. In this regard, we proposed different
343 15 55.43 4.34 105 values as the transaction cost and assessed their effects on two market
344 16 30.00 4.30 95 outputs: 1) the total groundwater quantities saved by the environmental
345 17 63.00 4.36 105
407 18 120.02 4.08 95
agent’s action and 2) the total agents’ income over ten years. The results
386 19 95.94 4.38 105 portrayed in Fig. 7 suggest that the amount of the first variable slightly
385 20 52.55 4.39 110 rises (Fig. 7 (a)) when the transaction cost increases until its peak at
12%. Then it drops due to removing participants with financial loss. In
contrast, the second variable’s amounts uniformly decline (Fig. 7 (b)) by
Table 3 ascending transaction costs. Thus, the current research presumes the
Phenological stages of pistachio growth (Goldhamer (2005)). optimum transaction cost is 12% (of the value of traded water between
agents and the market manager) which maximizes the market efficiency
Phenological stage Stage/trading season month
in saving groundwater.
Boom-leaf out 1 Apr
Shell expansion May
Shell hardening 2 Jun 10.3. The third mechanism
Nut filling 3 Jul
Nut filling Aug The third mechanism combines two previous mechanisms to propose
Shell splitting- Hull slip Sep
a novel strategy that employs both environmental agent action and
Harvest 4 Oct
Post-harvest Nov
groundwater abstraction reduction. Fig. 8 demonstrates results from
running the third mechanism in the selected study area over ten years.
Shadow prices constantly increase due to capping available water (Fig. 8
touch the Rafsanjan aquifer’s safe yield. (a)). Groundwater withdrawal is sharply diminished so that after the 7th
Results of running the first mechanism show that some agents are auction of the market employment, it equals the aquifer’s safe yield
sellers in the proposed market mechanism while others purchase bid (Fig. 8 (b)). According to Fig. 8 (c), Agents 1, 2, and 3 are not active in
quantities. Fig. 5 (c) demonstrates seller and buyer agents by negative the market because they experience financial loss by paying transaction
and positive volumes of traded water quantities. The agents’ selling and payments.
buying bid quantities for different seasons remarkably change by In the three proposed market mechanisms, agents’ annual income is
reducing available groundwater in the sub-region. The groundwater approximated before and after market implementation, and agents who
trading process occurred between agents and the market manager at experienced economic loss with the market implementation are with­
specified shadow prices and in the form of hours of pumping drawn because they are assumed to be unwilling to participate. Based on
groundwater. the market results, all agents tend to participate in the first market
Shadow prices are the same for all agents in each season because they mechanism to recoup their economic loss from capping groundwater
are allowed to pump groundwater from wells as much as they are abstraction. On the contrary, in the second and third mechanisms, some
reallocated without considering the wells’ location on the aquifer’s agents are unwilling to engage in the market because they must pay part
environmentally sensitive points and their depression cones (Fig. 5 (a)). of their financial income to the market manager as transaction cost.
Groundwater withdrawal gradually declines over ten auctions due to Thus, the number of active agents and the economic gain market adds to
capping available water, attenuating the groundwater table drawdown agents’ pre-market income decline during the second and third mech­
(Fig. 5 (b)), and giving rise to the actual value of bid quantities and anisms. Table 4 demonstrates the economic effectiveness of mechanisms
shadow prices (Fig. 5 (a)). Fig. 5 (d) depicts agents’ financial income over ten years. The first mechanism adds higher economic gain during
before and after experiencing the first market mechanism. As shown, the the planning horizon and, consequently, is more appealing for agents.
annual economic income of the study area grows on average by 6.53 The second mechanism is the least effective market mechanism from
billion Rials1 for each agent due to executing the first mechanism of the the environmental point of view (Table 4). The main reasons are
groundwater market. explained as follows: 1) the agents’ total available water is not capped by
applying the abstraction reduction coefficient, and 2) the environmental
10.2. The second mechanism agent’s action is insufficient to restore groundwater resources due to the
limitation of transaction cost value. Considering the current total
The second mechanism is designed to adjust groundwater abstrac­ available water for the study area (9.72 MCM) and the abstraction
tion while addressing agents’ economic loss. An environmental agent is reduction coefficient (0.3), market mechanisms should save 29.2 MCM
introduced to the market framework as a representative of RWRMCs to of groundwater over ten years (planning horizon). The third mechanism
act in favor of environmental purposes. This agent directly uses the conserves 24.93 MCM of groundwater over the mentioned planning
horizon, which implies nearly 85% of full environmental efficiency.
Hence, this mechanism is highly recommended and effective for aquifers
1
One USD equaled to 129,180 Iranian Rials in 2019. over drafted far more than their safe yield and need to be recovered

8
S. Safari et al.
Fig. 5. Results of implementing the first mechanism: a) variations of agents’ shadow price, b) groundwater withdrawal before and after market implementation
during ten auctions, c) bid quantities traded between agents (minus values represent sold bid quantities), and d) variations of agents’ annual financial income.
immediately.
11. Selecting the appropriate market mechanism and duration
To decide which mechanism over which time span performs more
efficiently for the study area, their impacts on groundwater table fluc­
tuations must be assessed using the groundwater simulation model. The
volume of the saturated zone of the aquifer is measured on a monthly
scale using the averaged hydraulic heads of pixels included by the area’s
boundaries. Fig. 9 exhibits fluctuations in the aquifer’s saturated zone
volume when five groundwater market mechanisms run over ten years
(2020–2030). Zero mechanism’s graph describes the consequences of
continuing groundwater withdrawal based on agents’ current IGEs
without market execution. The fourth mechanism is introduced as the
market execution in the absence of the environmental agent and dis­
regarding available water restrictions.
As shown in Fig. 9 all market mechanisms attenuate groundwater
depletion by different levels of effectiveness, among which the third
mechanism keeps the saturated zone volume higher than others. Since
agents’ participation in the groundwater market highly depends on the
financial gain it offers, the market’s profitability should be considered to
select the most suitable mechanism for the study area. Toward this end,
two essential criteria are computed and considered to assess the five
mentioned mechanisms: 1) the total financial income of market partic­
ipants in the study area over ten years, and 2) the volume of the satu­
rated zone at the last year of the market implementation. Fig. 10
suggests a Pareto frontier to decide which mechanism works optimally
according to the criteria’s preferability in the study area. The current
9
Journal of Environmental Management 332 (2023) 117409
research considers the two mentioned criteria equally influential and
critical and proposes the first groundwater market mechanism as the
most appropriate for the study area.
Variations of the two mentioned criteria are also considered to
answer the question of the optimum time span of reducing groundwater
abstraction during the planning horizon (Fig. 11.). The agents’ total
financial income ascends, while the groundwater storage declines when
the mentioned time span expands from two to ten years. Hence, two
Pareto frontiers are presented to decide based on the relative weights
assigned to each criterion. Since the two mentioned criteria are equally
essential, capping groundwater abstraction is proposed to be done in
five years. Running the first market mechanism with the selected time
span for IGEs reduction adds roughly 1330.44 billion Rials to agents’
income (12.5 trillion Rials of total post-market income) and conserves
23.33 MCM groundwater compared to the non-market situation.
Although five-year period of gradually capping agents’ IGEs offers more
economic gain compared to longer periods (Table 4), the total agents’
income will decline due to limiting available groundwater (Fig. 11 (a))
12. Groundwater market monitoring
12.1. In-situ data
Fig. 12 (b) exhibits the location of the local lysimeter, placed in an
experimental agricultural land owned by the Ministry of Pistachio
Institute in the west of Rafsanjan city. The weighing lysimeter is situated
close to Rafsanjan’s airport weather station and in the middle of an
orchard to measure actual pistachio ET using the gravimetric system.
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 6. Main results of the second market mechanism: a) variations of agents’ shadow price, b) groundwater withdrawal before and after market implementation
during ten auctions, c) traded bid quantities (minus values represent sold bid quantities), and d) variations of agents’ annual financial income.

Fig. 7. The variations of a) total bid quantities purchased by the environmental agent and b) the total agents’ income over ten years obtained by applying different
transaction costs.

Lysimeter ET data is recorded from 1992 through 2001 on a 20-day time
interval during the pistachio growth period (from March 21 to
November 15). Recorded ET data for 2000 and 2001 are considered for
the evaluation process in this research (Table 5). Meteorological data,
including daily temperature, relative humidity, dew point temperature,
and daylight hours, is collected from Rafsanjan’s airport weather station
for 2000 and 2001. Reference ET (ETr), the actual alfalfa ET, is also
calculated using the mentioned meteorological data and Ref-ET software
on a daily scale.
12.2. Satellite data
22 satellite Level-1 images of Landsat 7 with Enhanced Thematic
Mapper plus sensor (ETM+) were downloaded from the United States
Geological Survey (USGS), covering the pistachio growth period in 2000
and 2001. The Landsat 7 satellite orbits the earth in a near-polar and

10
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 8. Main results of implementing the third market mechanism: a) variations of agents’ shadow price, b) groundwater withdrawal before and after market
implementation during ten auctions, c) traded bid quantities (minus values represent sold bid quantities), and d) variations of agents’ annual financial income.

Table 4
The volume of groundwater saved in the aquifer and agents’ financial gain by
implementing market mechanisms over ten years.
Mechanisms First Second Third
mechanism mechanism mechanism

Saved GW (MCM) 16.03 11.82 24.93

Financial gain (billion 1307.8 624.8 622.4
Rials)

Fig. 10. The trade-off between total financial income and the groundwater
volume in the saturated zone obtained from different market mechanisms.

sun-synchronous circuit at an altitude of 705 km (438 mi) from the

earth’s surface and repeats its cycle every 16 days. The study area is
located in the overlap region of two image scenes, with paths 160 and
161 and row 39. Table 6 sorts the satellite images used in this study
based on the recorded date. Images covered by clouds are removed, and
a Region Of Interest (ROI) is cropped to facilitate the image’s data
process, consisting of the lysimeter pixels and surrounding agricultural
fields. Fig. 12 (a) presents the selected ROI and the lysimeter’s location.
Fig. 9. Variations of groundwater volume in the saturated zone of the Raf­
sanjan aquifer over ten years.

11
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 11. Variations of a) agents’ financial income over ten years and b) the groundwater volume in saturated zone considering different IGE’s reduction duration
through running the first mechanism.

Fig. 12. a) Selected ROI from a Landsat 7 radiance image, b) Situation of Lysimeter in agricultural lands of the Ministry of Pistachio Institute, and c) Pixels of the
image that covers the lysimeter body.

In the final step, the estimated ET of lysimeter pixels is compared to
lysimeter recorded data to evaluate the accuracy of SEBAL and METRIC
models in the study area.2
12.3. Calculating land surface temperature
SEBAL and METRIC models are highly sensitive to the anchor pixels’
2 satellite images.
Day of Year.
temperature. Therefore, the exact estimation of cold and hot pixels’
temperature remarkably affects the accuracy level of the estimated ET.
In this regard, the current research recommends two methods for Land
Surface Temperature (LST) retrieval. The Plank equation (Online sup­
plementary material, Equation S(6)) and Single Channel Algorithm
(SCA) (Online supplementary material, Equation S7 through S12) were
hired to calculate LST for selected anchor pixels and lysimeter pixels
(four pixels) for 16 chosen satellite images (See online supplementary
material). Table 7 shows the LST values of anchor pixels for selected

12
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Table 5 12.4. Actual daily ET of pistachio trees

Pistachio ET data measured by the local lysimeter in 2000 and 2001.
20-day time Start End Start -End ET (2000) ET (2001) Pistachio ET must be computed on the same time scale as the
interval No. date date (DOY) (mm/day) (mm/day) recorded lysimeter data. To accomplish this purpose, the values of actual
1 20- 8-Apr 80–99 1.34 2.13 daily ET are calculated for 240 days (12 × 20-day time intervals) from
Mar March 21 to November 15 for the years 2000 and 2001, using the
2 9-Apr 28- 100–119 1.74 2.32 interpolation of pistachio ET approximated for selected images dates
Apr (Fig. 13.). The fluctuation of the daily ET is due to non-linear daily
3 29-Apr 18- 120–139 1.83 2.72
May
changes in meteorological data and ETr. The gap between daily ET
4 19- 7-Jun 140–159 2.11 2.80 graphs, obtained by running different LST calculation algorithms for
May satellite images of 2001, suggests the different accuracy levels of the
5 8-Jun 27- 160–179 2.13 2.77 Plank equation and SCA methods to compute LST, especially in time
Jun
spans with limited image data (Fig. 13 (c)). This gap is reduced in graphs
6 28-Jun 17- 180–199 2.96 4.00
Jul showing METRIC results, implying a more precise performance of the
7 18-Jul 6-Aug 200–219 2.73 2.93 METRIC model to calculate pistachio ET using the same data (Fig. 13
8 7-Aug 26- 220–239 2.66 2.28 (d)). Estimated daily ET values are averaged every 20 days within the
Aug specified 240-day time interval to be compared to the lysimeter data.
9 27- 15- 240–259 1.89 1.87
Aug Sep
10 16-Sep 5-Oct 260–279 1.37 1.90 12.5. Evaluating SEBAL and METRIC results
11 6-Oct 25- 280–299 1.31 1.59
Oct 20-day averaged pistachio ET, estimated by SEBAL and METRIC
12 26-Oct 14- 300–319 0.99 0.80
models, are compared to 20-day averaged pistachio ET, measured by the
Nov
local lysimeter. The final results are assessed by computing MAE, RMSE,
R2, and KGE indices. Table 8 presents the value of mentioned indices and
implies that the METRIC algorithm with the application of SCA for
Table 6
computing land surface temperature has the most precise performance
Dates of the used Landsat 7 ETM + imagery data.
in the study area.
Image No. Date Day of Year Image No. Date Day of year

1 19-May- 140 9 3-Mar-01 62 13. Uncertainty analysis

00
2 26-May- 147 10 4-Apr-01 94 Hiring SEBAL and METRIC algorithms to measure actual pistachio
00
3 22-Jul-00 204 11 20-Apr-01 110
ET induces unexpected errors in monitoring water consumption. Since
4 7-Aug-00 220 12 29-May- 149 the best-performed energy balance model for the study area (METRIC)
01 creates up to 15% error (Table 8) in computing daily pistachio ET, water
5 14-Aug-00 227 13 23-Jun-01 174 users are able to violate their assigned RGEs up to 15% without being
6 8-Sep-00 250 14 17-Aug-01 229
noticed. Therefore, the created uncertainty of pistachio ET calculation
7 1-Oct-00 275 15 26-Aug-01 238
8 26-Oct-00 300 16 13-Oct-01 286 generates uncertainty related to the available water for the following
trading season. The Monte Carlo simulation model is employed to
determine the impacts of available water’s mentioned uncertainty on
the first market mechanism’s primary results, including agents’ financial
Table 7
gain, shadow prices, and the available water for the next trading
The temperature of anchor pixels retrieved from satellite imagery data (K).
seasons.
Plank method Single-channel algorithm
At first, 1000 random numbers are generated within 0–0.15 using a
Image Hot pixel Cold pixel Hot pixel Cold pixel uniform distribution function. Numbers are assumed to be the ET
Date temp. (K) temp. (K) temp. (K) temp. (K) overestimation errors of the METRIC/SCA model. Hence, the users’
19-May- 325 309 331 311
available water for the following season should be reduced as much as
00
26-May- 327 310 334 315 the model’s overestimation errors (random numbers). The graphs
00 demonstrating variations in agents’ available groundwater, shadow
22-Jul-00 324 311 329 314 prices, and annual financial gain are acquired by frequently running the
14-Aug- 325 312 333 318
market for 1000 different quantities of available water (Fig. 14.). The
00
26-Oct- 313 303 316 306
results show that under the uncertain condition of water consumption
00 during the first trading season, 1.3 MCM, 11.5 and 13 × 104 Rials, and
3-Mar-01 309 300 311 303 125 billion Rials are assumed to be the most probable agents’ available
4-Apr-01 322 308 326 310 water and agents’ averaged shadow price in the second trading season,
20-Apr- 319 307 327 310
and agents’ annual financial gain at the end of the auction, respectively.
01
29-May- 326 313 345 325
01 14. Summary and conclusion
23-Jun- 329 311 348 328
01
This paper proposed a long-term smart groundwater market frame­
17-Aug- 326 312 329 314
01 work to reallocate users’ groundwater entitlements based on their pro­
26-Aug- 323 311 335 318 ductivity from low-efficient to high-efficient ones. The proposed market
01 framework works through three main parts. First, users’ bid packages
13-Oct- 316 304 319 306 are set based on their yield functions and submitted to the market
01
manager to be traded. In the next step, based on bid packages, the most
5-Nov-01 307 300 309 301
worthless bid quantities of water are selected to be sold to the envi­
ronmental agent at the same offered prices. Thus, sold bid quantities will

13
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 13. Interpolated daily pistachio ET obtained by employing two LST models, Plank equation and SCA, and using a) SEBAL algorithm for recorded data of 2000, b)
METRIC algorithm for recorded data of 2000, c) SEBAL algorithm for recorded data of 2001, and d) METRIC algorithm for recorded data of 2001.

monitor users’ water consumption by calculating actual ET values of

Table 8
users’ cultivars.
Evaluating SEBAL and METRIC models’ performance in the study area.
The applicability and efficiency of the proposed market framework
Indices SEBAL METRIC were evaluated by applying it to the Nough plain in Iran. The findings
Plank equation SCA Plank equation SCA approved the groundwater market framework’s efficiency in achieving
R2 (%) 50 81 74 77 its economic and hydrologic aims. For example, the first mechanism
RMSE (mm/day) 0.55 0.38 0.41 0.37 conserved 16.03 MCM of groundwater in the Nough aquifer while
MAE (mm/day) 0.47 0.33 0.33 0.32 raising the economic efficiency of the agricultural field by 130.78 billion
KGE 0.74 0.77 0.69 0.75 Rials annually. For future studies, it is proposed to incorporate the un­
Percentage Error (%) 20.26 14.73 14.66 14.92
certainties of climatic variables, including precipitation, evapotranspi­
ration, and temperature. These variables can significantly affect the
be removed from bid packages before running the optimization model. values of agents’ traded water and its price.
In the third step, a multi-agent linear optimization model will be Furthermore, this paper does not consider the social impacts of
developed to reallocate the total available water to maximize users’ groundwater table drawdown and land subsidence on determining
annual benefits. The primary objectives of this market are to 1) increase water prices. Thus, the social aspects of the proposed groundwater
the economic gain of the market participants and 2) promote the reli­ market mechanisms will be studied in future works. Moreover, future
ability of shared groundwater resources. Toward this end, three market studies may include industrial and domestic water holders in the market
mechanisms were designed to employ two approaches: 1) reducing the framework to cover total groundwater use in the study area and provide
groundwater cap and 2) purchasing groundwater entitlements to restore a setting to trade groundwater entitlements between different sectors (i.
groundwater resources over the planning horizon. e., industrial, domestic, and agricultural sectors).
The distinctive part of the proposed market is its financial self-
sufficiency, through which environmental agent purchases ground­ Ethical approval
water entitlements using a transaction cost that participants must pay. A
three-dimensional groundwater simulation model was employed to Not applicable.
assess the impacts of water withdrawal on groundwater table fluctua­
tions during the planning horizon. Finally, the performance of SEBAL
and METRIC algorithms and Landsat imagery data were evaluated to

14
S. Safari et al. Journal of Environmental Management 332 (2023) 117409

Fig. 14. Probability distribution functions of a) agents’ available groundwater, b) agents’ averaged shadow price for the second trading season, and c) annual
financial gain of the study area.

Consent to participate the work reported in this paper.

Not applicable. Data availability

Consent to publish Data will be made available on request.

All authors agree to publish the manuscript. Acknowledgment

Funding The authors acknowledge the cooperation of Rafsanjan Pistachio

No funding was received for this research.
Credit author statement
Safoura Safari: Conceptualization, Methodology, Writing- Original
draft preparation, Software Soroush Sharghi: Conceptualization,
Methodology, Reviewing and Editing, Software Reza Kerachian: Su­
pervision, Methodology, Writing- Reviewing and Editing, Validation
Hamideh Noory: Methodology, Reviewing and Editing.
Declaration of competing interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
Research Institute and Ehya-Ab-Kavir Company for sharing basic data.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jenvman.2023.117409.
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