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This paper develops and applies an economically driven simulation model for California’s Friant-Kern system, a region characterized by diverse water sources employed predominantly for commercial irrigated agriculture, with significant local water trading activity. The economic-engineering simulation approach highlights the importance of representin...
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... on economic values and costs, users decide on both supply source and quantity of use. Unless constrained in avail- ability, water will be used to a point at which the marginal benefit from water use equals the marginal cost of supply. An economi- cally driven simulation model captures this behavior using eco- nomic water demand curves to represent the marginal net benefits of water use and users' willingness-to-pay for water Fig. 2. The water scarcity quantity represents the difference between de- liveries and beneficial use if supplies were unrestricted and free Jenkins et al. 2004. Economic scarcity, or scarcity cost, is the economic value to users of increasing deliveries to eliminate scar- city. This scarcity cost is calculated as the area beneath the de- mand curve Fig. 2 between the points of current water supply and maximum water demand Jenkins et al. ...
Context 2
... on economic values and costs, users decide on both supply source and quantity of use. Unless constrained in avail- ability, water will be used to a point at which the marginal benefit from water use equals the marginal cost of supply. An economi- cally driven simulation model captures this behavior using eco- nomic water demand curves to represent the marginal net benefits of water use and users' willingness-to-pay for water Fig. 2. The water scarcity quantity represents the difference between de- liveries and beneficial use if supplies were unrestricted and free Jenkins et al. 2004. Economic scarcity, or scarcity cost, is the economic value to users of increasing deliveries to eliminate scar- city. This scarcity cost is calculated as the area beneath the de- mand curve Fig. 2 between the points of current water supply and maximum water demand Jenkins et al. ...
Citations
... In this case, the availability of underground (much higher than surface) storage has allowed surface reservoirs to be operated less conservatively without, however, increasing the risk of system failure as a whole. For Marques et al. (2006), the availability and price associated with the exploration of surface and groundwater directly affect the operation of conjunctive use strategies, which may serve as inducers of effective solutions or render unfeasible some operations of alternate use, when the differences in exploitation costs are very large. Riegels et al. (2013) show that it is possible to increase welfare while meeting ecological and groundwater sustainability goals by using water pricing to support a conjunctive management strategy in which price signals encourage surface water use during wet years and groundwater use during dry years. ...
This chapter explores how conjunctive use operations of groundwater and surface water can be implemented to improve water supply reliability to urban and irrigated agriculture demands in Southern Brazil. We discuss the application of conjunctive use strategies and water management instruments under a comprehensive and integrated approach to improve water supply reliability and flexibility in a sustainable way. The discussion is followed by field examples where such strategies should build upon. We believe such combination is necessary to allow groundwater resources to fully contrib- ute to promoting economic growth in the long run, going beyond the aquifer and in- corporating its operation to broader and integrated water management required under the challenges ahead.
... The concept of "scarcity cost" is based on the loss of economic value (consumer surplus) when water is not available for the water urban user projected full supply (Marques et al., 2006;Jenkins et al., 2004). The analysis of efficient choices by consumers is more difficult than for a firm, given the former does not seek tangible profits. ...
How and when to upscale and finance nature-based solutions in watersheds in order to improve downstream urban water security is a global concern. In this paper we address such challenge by providing a novel method for planning the expansion of a chosen set of nature-based solutions that couples optimization of sequential decision-making, hydrology modelling and hydroeconomics in a single modeling framework. The benefits were considered the avoided costs of water scarcity and water treatment perceived downstream. The optimal expansion schedule of decisions was then defined under the objective function of minimizing total cost. We demonstrated the framework by applying it to a set of benchmark alternative scenarios for the Sinos River watershed (Brazil). We found that that the optimal schedule of nature-based solutions expansion is sensitive to the initial land use and future drivers. Treatment cost reduction was the greatest feature in some scenarios, confirming it as a strategy for addressing water quality issues of degraded watersheds. But the accounting of water scarcity cost introduced a tradeoff: expansion of nature-based solutions in well-preserved watersheds may not worth the investment. Future research may improve current limitations in scope and models without structural changes in the framework. Practical implications of this work arise from the funding of watershed payments for environmental services projects by institutions and governments, which demand evidence-based policies to support investment of public resources.
... Swap is an optimisation model that maximises the sum of producer surplus (regional profits) and derives the economic benefit to farmers from cropping operations (Draper et al., 2003;Howitt et al., 2001;Howitt et al., 2012). Swap has been used in several studies, including an assessment of climate change impacts on agricultural water demands in California (Medellin-Azuara et al., 2011), the economic evaluation of conjunctive use and water reservation in southern California (Pulido-Velazquez et al., 2004), an evaluation of the willingness to pay for water resources in a semi-arid region in Brazil (Silva et al., 2015), economic simulation of a water system in California (Marques et al., 2006) and integrated modelling of conjunctive water use in a canal-well irrigation system (Liu et al., 2013). ...
Promoting economically efficient solutions to meet competing demands for water under uncertain and variable supplies requires knowledge about the economic value of water and costs for its scarcity. In this work, an agricultural production optimisation model was used to evaluate the marginal value of water (MVW) in an agricultural region of rice and soybean growing in southern Brazil. The results indicate a MVW of 0.02–0.09 R$/m ³ (1 R$ = £0.14), which is higher than common values considered for water charges for agricultural uses in Brazilian watersheds. The total scarcity costs of two recent drought periods were also investigated – these were approximately R$138 million (£19 million) and accounted for up to 15.5% of irrigated rice and soybean agriculture net return in some of the studied regions. Finally, the potential for cropping mix changes for some regions was explored through short-term water reallocation programmes to mitigate drought impacts. The results of this work should be useful in the design of water policies in terms of improved economic water management instruments, key infrastructure investments to be prioritised by watershed plans, strategies to integrate with other sectoral policies to secure funding for new water infrastructure and strategies to reinforce local adaptation through crop mix changes and short-term water reallocation.
... Most of the models/systems in this category carried out economic assessment, but only 8 included social welfare direct measures. The economically driven simulation model developed by Marques et al. (2006) is a good example of the use of an IWRM tool with economic assessment. This model provides estimates of economic and operational impacts of alternative policies for the modeled system, represents demands based on users' willingness to pay for water, and improves economic approaches to water management. ...
Integrated Water Resources Management (IWRM) is increasingly important due to water scarcity, population growth, climate change, and deterioration of resource quality. IWRM requires analytical tools such as automated models and interactive systems, which may be difficult to implement, particularly in developing countries. This paper reviews existing basin-level models and decision support systems (DSSs) for public water allocation, provides application examples, and systematically reviews the literature on concepts arising from the definition of IWRM. Two environmental concepts considered in this review, water quantity-quality management and sustainability , were the most frequently used in revised allocation models, most of these in spatial decision support systems (SDSS). These automated systems presented, in most cases, three advantages: a well-developed friendly interface enabling application of more than one model, allowance for different decision criteria and restrictions together with the analysis of scenarios/sensitivity, and tight coupling and connection to spatial databases. This greatly facilitates and enhances their use by decision makers and stakeholders, favoring an environmentally sustainable management of water resources. Findings showed few models that combined the requirement of sustainable management maximizing economic well-being together with equality. Overall, most of the tools developed are prescriptive (optimiza-tion), nonlinear and deterministic models, which were not available through any DSS. In addition, allocation modeling that considers aspects of quantity-quality combined with economic optimization was almost entirely developed in the last decade of the analyzed period. Implementation of IWRM needs a process with participation of all the stakeholders involved, supported by hydrological and economic models integrated and available through DSS.
... Decisions to irrigate are typically based on soil moisture conditions, experience, peer behavior, and established practices (Foglia et al., 2018). Previous studies have relied on: (a) models to simulate physical hydrology and surface water-groundwater interactions with water distribution based on historical records (e.g., Githui et al., 2016;Tian et al., 2015), net irrigation requirements (e.g., Brookfield et al., 2017), or soil moisture conditions (e.g., Maxwell, 2014a, 2014b;Winter et al., 2017), (b) surface water distribution based on legal priority without consideration of groundwater (Kennedy-Jenks Consultants, 1998;Triana & Labadie, 2012), (c) surface water distribution based on legal priority with externally determined response functions for stream-aquifer interactions (e.g., Briand et al., 2008;Fredericks et al., 1998), (d) surface water distribution based on legal priority with groundwater simulated by an external model (e.g., La Marche, 2001;Valerio et al., 2010), or (e) surface water distribution based on legal priority with a loosely coupled groundwater model that does not necessarily ensure water balance for each time step (e.g., Marques et al., 2006). However, tightly coupled integrated operation-hydrology models that iterate on feedbacks have not been used, despite the significant impacts that these feedbacks have on water use and availability (Morway et al., 2016). ...
Applying models to developed agricultural regions remains a difficult problem because there are no existing modeling codes that represent both the complex physics of the hydrology and anthropogenic manipulations to water distribution and consumption. We apply an integrated groundwater – surface water and hydrologic river operations model to an irrigated river valley in northwestern Nevada/northern California, United States to evaluate the impacts of climate change on snow‐fed agricultural systems that use surface water and groundwater conjunctively. We explicitly represent individual surface water rights within the hydrologic model and allow the integrated code to change river diversions in response to earlier snowmelt runoff and water availability. Historically under‐used supplemental groundwater rights are dynamically activated within the model to offset diminished surface water deliveries. The model accounts for feedbacks between the natural hydrology and anthropogenic stresses, which is a first‐of‐its‐kind assessment of the impacts of climate change on individual water rights, and more broadly on river basin operations. Earlier snowmelt decreases annual surface water deliveries to all water rights, not just the junior water rights, owing to a lack of surface water storage in the upper river basin capable of capturing earlier runoff. Conversely, downstream irrigators with access to reservoir storage benefit from earlier runoff flowing past upstream points of diversion prior to the start of the irrigation season. Despite regional shifts toward greater reliance on groundwater for irrigation, crop consumption (a common surrogate for crop yield) decreases due to spatiotemporal changes in water supply that preferentially impact a subset of growers in the region.
... Yet, water markets are far from a universal solution [5] and further, they often fail to achieve their primary objective of economic efficiency unless an adequate regulatory and institutional framework is designed and implemented to sustain them [20][21][22]. In conjunctive use systems, different prices between local and non-local water, and between surface water and groundwater, may lead to overexploitation of groundwater resources even with a functioning market [23]. Optimization models tend to behave like water markets in the sense that they allocate water to most beneficial uses first, therefore comparing prescribed valuation to a historical benchmark has the potential to unveil some of the mechanisms that separate current operations from those that would result from a water market. ...
What is the economic value of storing water for future droughts, and what are the consequences of this valuation for water management? One way to answer this question is to ask: ‘what is the valuation, which if used, would maximize a region's economic use of water?’ This prescriptive valuation can be done by linking classical hydro-economic models to global search methods. Another way to answer this question is to ask: ‘what do historical water management operations reveal about water's economic value?’ Indeed, past reservoir uses reveal the empirical inter-temporal valuations of past water managers. Although they may not have been optimized in a formal sense, in mature water resource systems with economic water demands, reservoir storage rules evolve via a socio-political process to embody societies' valuation of water. This empirical, ‘positive’, or descriptive valuation is captured by calibrating a hydro-economic model such that carry-over storage value functions enable simulated storage to match a historical benchmark. This paper compares both valuations for California's Central Valley revealing that carryover storage values derived from historical operations are typically greater than prescribed values. This leads to a greater reliance on groundwater use in historical operations than would have been achieved with system-wide optimization. More generally, comparing the two approaches to water valuations can provide insights into managers' attitudes as well as the impact of regulatory and institutional constraints they have to deal with – and that are not necessarily included in optimization models.
... Simulation approaches evaluate the effects of scenarios and policies over time (e.g. Bredehoeft and Young 1983, Marques et al 2006, Steward et al 2009, MacEwan et al 2017, while optimization finds an optimal solution, which is in case of groundwater withdrawal pertains to finding economically efficient withdrawal trajectories. Optimization often uses analytical solutions from optimization methods such a calculus of variations and dynamic programming, which makes them more suitable to be used with simple aquifer parameterizations (Burt 1964, 1967, Gisser and Sanchez 1980, Negri 1989, Merrill and Guilfoos 2017, although optimization methods have also been merged with simulation methods, e.g. to simulate economic behaviour (optimal farm decisions on groundwater use and crop production) of users over time (Marques et al 2006), or optimal conjunctive use of surface and groundwater (Pulido-Velazquez et al 2004, 2006. ...
... Bredehoeft and Young 1983, Marques et al 2006, Steward et al 2009, MacEwan et al 2017, while optimization finds an optimal solution, which is in case of groundwater withdrawal pertains to finding economically efficient withdrawal trajectories. Optimization often uses analytical solutions from optimization methods such a calculus of variations and dynamic programming, which makes them more suitable to be used with simple aquifer parameterizations (Burt 1964, 1967, Gisser and Sanchez 1980, Negri 1989, Merrill and Guilfoos 2017, although optimization methods have also been merged with simulation methods, e.g. to simulate economic behaviour (optimal farm decisions on groundwater use and crop production) of users over time (Marques et al 2006), or optimal conjunctive use of surface and groundwater (Pulido-Velazquez et al 2004, 2006. Also, distinction is made between holistic approaches, where hydroeconomic and hydrologic/hydrogeologic models are fully integrated (e.g. ...
... Bredehoeft and Young 1983, Marques et al 2006, Steward et al 2009, MacEwan et al 2017, while optimization finds an optimal solution, which is in case of groundwater withdrawal pertains to finding economically efficient withdrawal trajectories. Optimization often uses analytical solutions from optimization methods such a calculus of variations and dynamic programming, which makes them more suitable to be used with simple aquifer parameterizations (Burt 1964, 1967, Gisser and Sanchez 1980, Negri 1989, Merrill and Guilfoos 2017, although optimization methods have also been merged with simulation methods, e.g. to simulate economic behaviour (optimal farm decisions on groundwater use and crop production) of users over time (Marques et al 2006), or optimal conjunctive use of surface and groundwater (Pulido-Velazquez et al 2004, 2006. Also, distinction is made between holistic approaches, where hydroeconomic and hydrologic/hydrogeologic models are fully integrated (e.g. ...
Population growth, economic development, and dietary changes have drastically increased the demand for food and water. The resulting expansion of irrigated agriculture into semi-arid areas with limited precipitation and surface water has greatly increased the dependence of irrigated crops on groundwater withdrawal. Also, the increasing number of people living in mega-cities without access to clean surface water or piped drinking water has drastically increased urban groundwater use. The result of these trends has been the steady increase of the use of non-renewable groundwater resources and associated high rates of aquifer depletion around the globe. We present a comprehensive review of the state-of-the-art in research on non-renewable groundwater use and groundwater depletion. We start with a section defining the concepts of non-renewable groundwater, fossil groundwater and groundwater depletion and place these concepts in a hydrogeological perspective. We pay particular attention to the interaction between groundwater withdrawal, recharge and surface water which is critical to understanding sustainable groundwater withdrawal. We provide an overview of methods that have been used to estimate groundwater depletion, followed by an extensive review of global and regional depletion estimates, the adverse impacts of groundwater depletion and the hydroeconomics of groundwater use. We end this review with an outlook for future research based on main research gaps and challenges identified. This review shows that both the estimates of current depletion rates and the future availability of non-renewable groundwater are highly uncertain and that considerable data and research challenges need to be overcome if we hope to reduce this uncertainty in the near future.
... The changes in supply, demand, water quality, preservation of ecosystems and social and economic welfare, as well as the effects of climate change on watersheds, were assessed (Quinn et al., 2001). All the approaches of 'hydrologic models' in combination with the SWAP/WADE model were developed by Marques et al. (2006). In other studies in this field (Ward and Pulido-Velázquez, 2008;Harou et al., 2009), the economic model was coupled with hydrological models to optimize water resources allocation under drought conditions and to evaluate various water allocation policies and management options under different climate scenarios in different sectors. ...
This study introduces a practical approach for agricultural water distribution within conveyance and delivery systems based on economic perspectives. To this end, a hydro‐economic approach is used by coupling an economic model, positive mathematical programming (PMP), and a water evaluation and planning system (WEAP) hydrological model. The economic value of water (EVW) is calculated separately for the secondary canals (L 1 to L 10 ) by the PMP model, based on simulation of the existing agricultural conditions. The results obtained indicate that under the operational method introduced, the EVW per unit of water (cubic metres) will rise on average by over 28% in comparison to the existing water distribution conditions in the district. Moreover, the results show that the highest and lowest EVW growth took place within farming areas irrigated by the laterals of L 10 and L 1 , respectively. According to the results, the most significant reduction in the cultivation area in the existing cropping pattern was observed in alfalfa and maize compared to other crops under the drought conditions scenario. The results of the study show that the economic benefit (water volume × economic value) will amount to 138 billion IRR (Iranian monetary unit) compared to the primary conditions. © 2019 John Wiley & Sons, Ltd.
... In this context, models coupling human activities with hydrologic processes have been successfully developed as solutionoriented tools for integrated water resources management (Mariño and Simonovic 2001;Harou et al. 2009;Pulido-Velazquez et al. 2016) and water policy analysis (Mulligan et al. 2014;Wu et al. 2015). Hydroeconomic models are frequently used methods for water management study because they can represent temporal and spatial patterns of water resource systems, management choices, and economic values in an integrated manner (Draper et al. 2004;Marques et al. 2006;Harou et al. 2009). When focus is given to the behavior of stakeholders, an agent-based modeling (ABM) approach is widely adopted for simulation of domestic water consumption in complex water systems (Galán et al. 2009;Ma et al. 2012), groundwater management (Mulligan et al. 2014;Castilla-Rho et al. 2015), water allocation management (Yang et al. 2009(Yang et al. , 2012, and water contamination events (Zechman 2011;Shafiee and Zechman 2013) because ABM can explicitly illustrate impact factors in the decision-making process (Soman et al. 2008). ...
Confronted with diverse water management schemes, policymakers in arid basins face difficulty in choosing a particular scheme due to a lack of appropriate tools to estimate possible physical and economic outcomes in a comprehensive manner. This study develops a coupled agent-hydrologic model to both capture and provide insights into the dynamics and patterns of real-world water management using the midstream area of the Heihe River Basin in northern China as a case study. Water consumption patterns, economic efficiency, and environmental externalities of three different management schemes, namely an administered scheme (AS), a surface-water market scheme (SWMS), and a surface-water-groundwater market scheme (SGWMS) are evaluated. The results show that an agent's (irrigation district) behaviors under market schemes are determined by the difference between equilibrium price and pumping cost, related to water table depth. The annual total benefits are improved under market schemes, especially in dry years. Negative environmental effects of the market schemes do occur but are not significant. The travel time of groundwater corresponds to a delay longer than 2 months in upper agents' pumping influence on drawdown. In general, the proposed model application in this study addresses complex real-world management issues by presenting physically interpretable and verifiable outcomes, and therefore aids policymakers in decision making by providing a broader view of water management.
... The MODSIM river basin network model is a river basin management decision support system (DSS) model for the analysis of long term operational planning and short term water management, drought contingency planning and for resolving conflicts between urban, agricultural and environmentally concerned stakeholders (Labadie, 1995). Although the model has been used for the simulation of river systems worldwide (Larson and Spinazola, 2000;Marques et al., 2006;Sulis and Sechi, 2013), it appears to be not so well-known. MODSIM uses a state-of-the-art network flow optimization (NFO) algorithm to allocate flows in a river basin, in accordance with specified water rights and other priority rankings (Labadie, 1995). ...
Agriculture is one of the environmental/economic sectors that may adversely be affected by climate change, especially, in already nowadays water-scarce regions, like the Middle East. One way to cope with future changes in absolute as well as seasonal (irrigation) water amounts can be the adaptation of the agricultural crop pattern in a region, i.e. by planting crops which still provide high yields and so economic benefits to farmers under such varying climate conditions. To do this properly, the whole cascade starting from climate change, effects on hydrology and surface water availability, subsequent effects on crop yield, agricultural areas available, and, finally, economic value of a multi-crop cultivation pattern must be known. To that avail, a complex coupled simulation-optimization tool SWAT-LINGO-MODSIM-PSO (SLMP) has been developed here and used to find the future optimum cultivation area of crops for the maximization of the economic benefits in five irrigation-fed agricultural plains in the south of the Karkheh River Basin (KRB) southwest Iran. Starting with the SWAT distributed hydrological model, the KR-streamflow as well as the inflow into the Karkheh-reservoir, as the major storage of irrigation water, is calibrated and validated, based on 1985-2004 observed discharge data. In the subsequent step, the SWAT-predicted streamflow is fed into the MODSIM river basin Decision Support System to simulate and optimize the water allocation between different water users (agricultural, environmental, municipal and industrial) under standard operating policy (SOP) rules. The final step is the maximization of the economic benefit in the five agricultural plains through constrained PSO (particle swarm optimization) by adjusting the cultivation areas (decision variables) of different crops (wheat, barley, maize and "others"), taking into account their specific prizes and optimal crop yields under water deficiency, with the latter computed in the LINGO-sub-optimization module embedded in the SLMP-tool. For the optimization of the agricultural benefits in the KRB in the near future (2038-2060), quantile-mapping (QM) bias-corrected downscaled predictors for daily precipitation and temperatures of the HadGEM2-ES GCM-model under RCP4.5- and RCP8.5-emission scenarios are used as climate drivers in the streamflow- and crop yield simulations of the SWAT-model, leading to corresponding changes in the final outcome (economic benefit) of the SLMP-tool. In fact, whereas for the historical period (1985-2004) a total annual benefit of 94.2 million US$ for all multi-crop areas in KRB is computed, there is a decrease to 88.3 million US$ and 72.1 million US$ for RCP4.5 and RCP8.5, respectively, in the near future (2038-2060) prediction period. In fact, this future income decrease is due to a substantial shift from cultivation areas devoted nowadays to high-price wheat and barley in the winter season to low-price maize-covered areas in the future summers, owing to a future seasonal change of SWAT-predicted irrigation water available, i.e. less in the winter and more in the summer.
