Conference Agenda

Session

Thematic Session: Economics of irrigation and energy transition

Time:

Thursday, 02/July/2026:

2:15pm - 4:00pm

Session Chair: Rahel Deribe Bekele, Duke University
Session Chair: Marc Jeuland, Duke University

Location: B137

Session Abstract

As climate change and variability intensify, irrigation has become an essential adaptation strategy for smallholder farmers to mitigate production risks (Koundouri et al., 2006; Xie et al., 2014; Zaveri et al., 2020). Irrigated agriculture plays a fundamental role in the sustainability of rural livelihoods (Hussain & Hanjra 2004; Domenech & Ringler 2013), but it also exerts significant pressure on energy systems and groundwater reserves (Shah, 2009; Foster & Perry, 2010). Indeed, the energy-irrigation nexus presents a dual economic and environmental challenge: fossil-fuel-dependent (diesel) pumping is increasingly expensive and causing local and climate-damaging pollution, often acting as a barrier to expansion (Jeuland et al., 2025). At the same time, while subsidized electricity can lower costs, it often leads to unsustainable groundwater extraction (Badiani et al., 2012; Fishman et al., 2015;). Across developing countries, farmers thus increasingly face a critical energy transition—shifting from diesel to grid electricity, solar-powered irrigation, and pricing reforms—that is reshaping net returns, water use behavior, and climate adaptation outcomes (Burney et al., 2010; Shah, 2023). Understanding the economic, environmental, and institutional implications of this transition is central to environmental and resource economics (IRENA & FAO, 2021; Mukherji, 2022).

This thematic session brings together empirical studies from Sub-Saharan Africa and South Asia that examine the economics of irrigation energy choices and policies through the lens of returns to agriculture, energy demand, resource sustainability, and resilience. The papers are united by a common focus on the water–energy–food nexus and employ rigorous empirical and mixed-method approaches to analyze farmer behavior, technology adoption, and policy design.

By integrating evidence across diverse contexts, the session enhances understanding of how energy transitions in irrigated agriculture influence economic outcomes, environmental externalities, and climate adaptation—core themes of WCERE 2026. The session relates directly to conference topics on energy, climate change, environmental regulation, development, and the water–energy–food nexus.

Presentations

Energy options for irrigated agriculture and their impacts on return: evidence from Ethiopia

Rahel Deribe Bekele¹, Dawit Mekonnen², Tiruwork Arega³, Marc Jeuland¹

¹Duke University, United States of America; ²The World Bank, United States of America; ³UNU-MERIT, Maastricht University, Maastricht, the Netherlands

Irrigated agriculture often relies on modern energy technologies, but farmers must choose between options with different costs, benefits, and long-term returns. This study uses a mixed methods approach: a comprehensive household and plot-level survey from Ethiopia (2016/17) with qualitative data from focus group discussions. It also incorporates bio-physical data linked to geo-referenced locations. We mainly apply econometric analyses to estimate net returns from different energy sources and compare them. Results show that while diesel pumps yield the highest value of production per hectare, net returns are higher with electric pumps and manual systems. Increased fuel and maintenance costs are the main reasons for the low net return of diesel pump systems. These results highlight that high energy costs are a significant barrier to improving agricultural productivity in this context.

Evaluating the adaptation benefits of smallholder solar irrigation systems in Kenya

Alejandro Diaz-Herrera¹, Marc Jeuland¹, Mirna Elsharief¹, Liilnna Teji¹, Ferran Vega-Carol¹, Richard Mbithi Mulwa², Elly Musembi²

¹Duke University, United States of America; ²University of Nairobi, Kenya

While prior research examines irrigation or electrification separately, we evaluate a bundled intervention delivering solar-powered irrigation and electricity services through pay-as-you-go credit. Using baseline (Oct 2023–Mar 2024) and endline (Mar–Apr 2025) surveys of 753 smallholder households across six Kenyan counties, we match SunCulture pump purchasers to comparable non-purchasers and estimate impacts with difference-in-differences. Outcomes include economic indicators, food security and dietary diversity, agricultural practices and labor, social capital, household wealth, women’s time use and agency, and resilience using a pilot of IFAD’s Ability to Recover (ATR) metric. Early results suggest gains, but learning-by-doing likely delays many impacts substantially.

Pricing Farm Electricity, Water Use and Efficiency: The Case of Paddy Cultivation in Punjab, India

Disha Gupta

Indira Gandhi Institute of Development Research, India

There has been a declining trend in groundwater depths in India and subsidies on farm electricity contribute to over-extraction of groundwater raising concerns about its sustainability for irrigation. In this paper, we estimate the reduction in groundwater pumping under volumetric pricing of farm electricity for Punjab where farm electricity is free. We use parcel-level cost of cultivation data from the Ministry of Agriculture for 2011-12 to 2013-14 to estimate the production function for paddy using the instrumental variable approach. We find that the estimated marginal product of water function is relatively flat at the level of the average water application. The average marginal product of water is 34 kilograms for an additional thousand cubic meters of water per hectare, which is very low. Simulations show that increasing the price of electricity from current level of zero to the true cost of electricity supply leads to sharp cutbacks of 59 percent in water extraction using electric pumps, while the decline in average paddy yields is 11 percent, keeping all the other inputs constant. Allowing adjustment in all the inputs and assuming Cobb-Douglas production function, we find that the reduction in average groundwater pumping is even sharper at about 79 percent. However, the reduction in paddy yields roughly triples due to reduced use of other inputs. The saved up resources have the potential of being utilised for diversifying to crops with lower water requirements. Finally, we quantify the average lump-sum subsidy that can be given to farmers as direct transfers to keep their surplus unchanged and we show that this can be financed within the system using collections done by the state electricity board from pricing electricity. The paper provides an important policy framework which allows for efficient use of scarce water resources along with protecting farmers’ incomes, and ensuring food security for sustainable agricultural and economic development.