(FiT) was introduced. The idea was to buy
energy at higher prices from small to large scale
energy producers (IEA 2017). Sadeghi et al.
(2017) showed that the expansion of renewable
energy generation in Iran has the potential to
generate a substantial number of direct and
indirect jobs. However, the potential of this
approach has not really been explored as a rural
development tool for creating alternative sustainable livelihood for rural regions. Thus, von
Heyking and Jaghdani (2017) have compared the
solar energy generation on a small scale in Iran
and Germany by considering the latest tariffs
available and macro-economic factors such as
interest rates and discount rates. This study
shows that, in spite of higher tariffs in Iran,
higher interest and discount rates can make such
a small investment without governmental help
less profitable. Furthermore, the expansion of
renewable energy on a small scale will be much
more profitable in macroeconomic conditions
that are more stable than today’s conditions. The
possibility of using solar energy for rural development and its advantages or disadvantages
requires a separate study that is beyond the scope
of this paper. It is nevertheless noteworthy that
there is growing international interest in the
interconnections between solar energy and
groundwater pumping. The Consultative Group
for International Agricultural Research (CGIAR)
has considered solar pumps for shallow and
abundant aquifers as one of the ten innovations
for future rural development (Dinesh et al. 2017).
From a first glance, these innovations seem
irrelevant for Iran because its wells are mainly
deep in the depleted aquifers and they need more
energy for pumping. However, the idea of selling
energy locally can be considered a possible
alternative livelihood strategy in the rural areas
of Iran. It must be mentioned, however, that very
cheap solar energy can lead to further depletion
of groundwater resources when the official electricity tariffs are high. Within such a future scenario, generated electricity may be used for
pumping water. Therefore, the nexus between the
cost of solar energy generation, the official FiT of
renewable energy, official electricity tariffs, and
water extraction is a separate study that should be
considered in the future as solar energy becomes
available at cheaper prices.
The solution to the Iranian WEF nexus should
be studied and tackled from different dimensions
of nexus governance. In this study, we have
discussed the political economy aspects of this
relationship and showed that phasing out energy
subsidies for irrigation pumping cannot be done
easily when millions of people are dependent on
that. However, creating alternative livelihood
strategies for rural populations can be a starting
point in applying economic tools to groundwater
management.
5 Conclusions
In this chapter, we have analyzed historical
trends of groundwater consumption in Iran’s
agricultural sector and presented an overview of
the water management institutions which
encourage intensive groundwater use in Iran. The
current usage appears to be far from sustainable
and it will threaten both food production in different rural communities and freshwater availability for basic needs. Therefore, in the near
future, SDG2 and SDG6 are unlikely to be
accomplished by supporting agricultural production with the help of irrigation water from
groundwater resources. Cheap energy due to
heavy subsidies will have devastating effects on
freshwater resources and SDG2 and SDG6 for
Iran. Although rising energy prices can represent
an economically acceptable approach for
managing groundwater consumption, it cannot
be easily implemented. The outcomes of the
subsidy reforms have shown that, even though
reform was successful in cutting energy subsidies
in non-agricultural sectors, the program did not
achieve the desired results in the agricultural
sector. Although energy price management can
enable the sustainable management of groundwater resources, an alternative has to be presented to farmers to reduce their opposition and
potential political distress. Results suggest that a
reform process that stipulates subsidies
retrenchment can be accelerated if the central
government acknowledges and deals with
124
T. Jamali Jaghdani and V. Kvartiuk
energy at higher prices from small to large scale
energy producers (IEA 2017). Sadeghi et al.
(2017) showed that the expansion of renewable
energy generation in Iran has the potential to
generate a substantial number of direct and
indirect jobs. However, the potential of this
approach has not really been explored as a rural
development tool for creating alternative sustainable livelihood for rural regions. Thus, von
Heyking and Jaghdani (2017) have compared the
solar energy generation on a small scale in Iran
and Germany by considering the latest tariffs
available and macro-economic factors such as
interest rates and discount rates. This study
shows that, in spite of higher tariffs in Iran,
higher interest and discount rates can make such
a small investment without governmental help
less profitable. Furthermore, the expansion of
renewable energy on a small scale will be much
more profitable in macroeconomic conditions
that are more stable than today’s conditions. The
possibility of using solar energy for rural development and its advantages or disadvantages
requires a separate study that is beyond the scope
of this paper. It is nevertheless noteworthy that
there is growing international interest in the
interconnections between solar energy and
groundwater pumping. The Consultative Group
for International Agricultural Research (CGIAR)
has considered solar pumps for shallow and
abundant aquifers as one of the ten innovations
for future rural development (Dinesh et al. 2017).
From a first glance, these innovations seem
irrelevant for Iran because its wells are mainly
deep in the depleted aquifers and they need more
energy for pumping. However, the idea of selling
energy locally can be considered a possible
alternative livelihood strategy in the rural areas
of Iran. It must be mentioned, however, that very
cheap solar energy can lead to further depletion
of groundwater resources when the official electricity tariffs are high. Within such a future scenario, generated electricity may be used for
pumping water. Therefore, the nexus between the
cost of solar energy generation, the official FiT of
renewable energy, official electricity tariffs, and
water extraction is a separate study that should be
considered in the future as solar energy becomes
available at cheaper prices.
The solution to the Iranian WEF nexus should
be studied and tackled from different dimensions
of nexus governance. In this study, we have
discussed the political economy aspects of this
relationship and showed that phasing out energy
subsidies for irrigation pumping cannot be done
easily when millions of people are dependent on
that. However, creating alternative livelihood
strategies for rural populations can be a starting
point in applying economic tools to groundwater
management.
5 Conclusions
In this chapter, we have analyzed historical
trends of groundwater consumption in Iran’s
agricultural sector and presented an overview of
the water management institutions which
encourage intensive groundwater use in Iran. The
current usage appears to be far from sustainable
and it will threaten both food production in different rural communities and freshwater availability for basic needs. Therefore, in the near
future, SDG2 and SDG6 are unlikely to be
accomplished by supporting agricultural production with the help of irrigation water from
groundwater resources. Cheap energy due to
heavy subsidies will have devastating effects on
freshwater resources and SDG2 and SDG6 for
Iran. Although rising energy prices can represent
an economically acceptable approach for
managing groundwater consumption, it cannot
be easily implemented. The outcomes of the
subsidy reforms have shown that, even though
reform was successful in cutting energy subsidies
in non-agricultural sectors, the program did not
achieve the desired results in the agricultural
sector. Although energy price management can
enable the sustainable management of groundwater resources, an alternative has to be presented to farmers to reduce their opposition and
potential political distress. Results suggest that a
reform process that stipulates subsidies
retrenchment can be accelerated if the central
government acknowledges and deals with
124
T. Jamali Jaghdani and V. Kvartiuk