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Agricultural economics Water Programming Models (WPM) has found that irrigators in water scarce areas have a rather inelastic response to water prices, making water pricing cost-ineffective towards water saving. We hypothesize that the predicted water saving performance of pricing is significantly underestimated by issues of model structure, due to the exclusion of deficit irrigation from the set of decision variables available to agents in conventional WPM. To test our hypothesis, we develop a model that integrates a continuous crop-water production function into a positive multi-attribute WPM, which allows us to assess agents' adaptive responses to pricing through deficit irrigation. The model is illustrated with an application to the El Salobral-Los Llanos irrigated area in Spain. Our results show that incorporating deficit irrigation as an adaptation option makes the water demand curve significantly more elastic as compared to an alternative model setting where deficit irrigation is precluded. We conclude that ignoring deficit irrigation can lead to a significant underestimation of the cost-effectiveness of water pricing towards water saving.

As water scarcity grows, irrigators are adopting modern irrigation systems to increase the proportion of water use consumed by crops and mitigate impacts on production. This increased beneficial consumption is fundamentally sourced by lower return flows‐runoff and percolation‐back into the environment, which are critical to sustain wetlands and other irrigation‐dependent green infrastructures that supply valuable ecosystem services. We adopt an innovative multi‐model ensemble of mathematical programming models to assess irrigators' responses to pecuniary compensations designed to sustain irrigation‐dependent ecosystem services (Payments for Watershed Services‐PWS), under multiple scenarios. The upshot is a database of forecasts that represents the range of plausible future states, which is used to assess economic performance and identify a robust adaptation strategy to growing scarcity. Our analysis of the Reno River Land Reclamation and Irrigation Board in NE Italy shows that, under most models and scenarios, the conservationist strategy has a superior economic performance than the autonomous adaptation strategy where modern irrigation systems are adopted. The conservationist strategy is also found more robust than the autonomous strategy. However, unless sensible incentives are put in place, irrigators may adopt irrigation technologies nonetheless. Under mild to moderate climate change scenarios, removing existing subsidies to modern irrigation systems is sufficient to deter their adoption. Under severe climate change scenarios, additional PWS to irrigators will be necessary to ensure the sustainability of irrigation‐dependent ecosystem services.

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