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<br />. <br /> <br />entrepreneur will undertake the investment to improve quality since <br /> <br />he cannot collect the increased value of his investment from the beneficiaries. . <br /> <br />~ <br />o Thus, if quality-improving investment is to be undertaken, it must be <br />o <br />,..... <br /> <br />~ " <br /> <br />done by a public body. <br /> <br />. <br /> <br />This option of public investment in quality improvement may improve <br /> <br />the welfare positions of both upstream and downstream users, depending <br /> <br />on the distribution of the costs and benefits of the investment. It might <br /> <br />. <br /> <br />take many forms - investment in off-farm desalination plants or other <br /> <br />mechnaical devices to remove salt, investment to increase water supplies <br /> <br />in the entire system or to alter seasonal deliveries that would minimize <br /> <br />. <br /> <br />the damages of given salt loads, and controlling evapotranspiration by <br /> <br />phreatophytes. Obviously, investment in quality improvement can apply <br /> <br />. <br /> <br />to all forms and sources of pollution, but may be about the only effective <br /> <br />alternative for reducing salinity from overland runoff and natural or <br /> <br />point sources. <br /> <br />. <br /> <br />Off-farm investment to develop new water supplies, or in storage <br /> <br />to improve the timing of deliveries, or in reducing evapotranspiration <br /> <br />losses by phreatophytes, would shift the MED curve downward and to the <br /> <br />. <br /> <br />right. Each level of water use by irrigators would inflict smaller damages <br /> <br />on downstream users. This implies also an increase in optimal water <br /> <br />. <br /> <br />use upstream" and thus, both groups could be made better off. These <br /> <br />public investment alternatives should be evaluated by the economic criterion <br /> <br />that if they produce more social benefits than their resource opportunity <br /> <br />. <br /> <br />12 <br /> <br />. <br />