modeling impacts of policy responses to prolonged and severe drought in the upper rio grande river...
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Modeling Impacts of Policy Responses to Prolonged and Severe Drought in the
Upper Rio Grande River Basin
Dr. James F. Booker, Siena College
Douglas T. Hickey Professor of Business and Associate Professor of Economics
Ari M. Michelsen, Texas A&M University, El Paso
Frank A. Ward, New Mexico State University
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Drought is a human construct and may relate to hydrologic,
ecologic, or economic impacts
Policy Responses
• Endangered Species Protections
• Realistic incentives including pricing
• Regional water reallocations
• Interstate water reallocations
• Do nothing
Modeling impacts of policy responses
• Physical impacts on flows, stocks, and uses
• Distribution of economic impacts– by region and state– by use sector (agricultural, municipal)
• Efficiency impacts
Long term reforms
• Environmental protections
• Realistic incentives
• Reallocation from agriculture to other uses
Drought as catalyst for institutional change
Allocating the Colorado RiverOctober 17, 2002:
• “Southern California water officials agreed Wednesday to shift water from desert farms to San Diego.”
• “The farmers would be paid $258 to $400 an acre-foot for water that costs them $15.50 per acre-foot.”
Source: Los Angeles Times
Shores of Lake Mead:
Las Vegas Valley Water District
Lake Powell at Hite Marina:
Living Rivers
Introduction
• About the upper Rio Grande
• Modeling extended drought and policy responses
• Physical and economic impacts
• Extensions to other river basins
How much water is in this river?(annual mean flow in million acre-feet)
Mississippi 340
Colorado 16
Hudson 10
Rio Grande 2
Schoharie Creek 1
Rio Grande Headwaters, Colorado, USA
Rio Grande Headwaters, Colorado: Supply 660,000 Ac-Ft / Yr
Rio Grande Gorge: Northern New Mexico
MichelsenMichelsen
Rio Puerco, New Mexico: Supplies 32,000 Ac-Ft /Yr
Rio Grande, Southern New Mexico Ag Uses 495,000 Ac-Ft / Yr
MichelsenMichelsen
Rio Grande at El Paso, Texas: M&I Uses 140,000 Ac-Ft / Yr
Rio Grande at Juarez, Mexico: Ag Uses 60,000 Ac-Ft / Yr
Who gets what: existing policies
• Interstate compacts and treaties
• State water allocation institutions
• Allocations within federal irrigation projects
• Reservoir operating rules
Rio Grande Compact: Entitlement=f(inflows)
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300
600
900
0 500 1000 1500 2000
Upper Rio Grande Inflows (thousand af/yr)
Wa
ter
allo
ca
tio
n
(th
ou
sa
nd
af/
yr)
Colorado
NM
Texas
Mexico
Instream Flow (above Elephant Butte)
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Legally allowed diversions
lowest decile
median
highest decile
Colorado
New Mexico
TexasMexico
Basic Dynamic Model of a Rio Grande Type System
• Depletable reservoir/aquifer (and no pumping constraint)
• Variable surface flow
• Two users
If ground and surface water are perfect substitutes, and there are no annual pumping or diversion limits, then the problem of
dynamically allocating surface water flows tx between users 1 and 2, and a groundwater stock Z over time can be written as
ttttt t
xVzxV 2211 ()(1
max
subject to ttt xxx 21 ( t )
Zzt
t ( )
where t
1 is the discount factor, t is the rate of growth in rents
for user 1 (representing urban population growth and demand), and )(iV is the rent (gross benefit minus cost) for users i = 1 and 2.
T h is d e sc r ib e s p e r fec t co n ju n c tive u se , and the so lu t io n is to u se ava ila b le su p p lie s to g ene ra te co n sta n t d isco u n ted m a rg in a l ren ts a c ro s s tim e , so u rce , a n d sp a ce :
tttt
t
ss
s
tt
t
x
V
z
V
x
V
x
V
2
2
1
1
1
1
1
1 1
Background
• Ward et al. Institutional Adjustments for Coping With Prolonged and Severe Drought in the Rio Grande Basin, WRRI Technical Completion Report No. 317, Feb. 2001.
The Rio Grande Setting
• Highly variable river basin inflows• Extensive use and availability of renewable
and non-renewable groundwater• Reservoir storage equal to several years
average annual inflow• Rapidly growing (3+ %) urban population;
agriculture uses ~90% of surface water• Presence of an endangered species
Rio Grande at Del Norte
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200,000
400,000
600,000
800,000
1,000,000
1,200,000
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
year
annu
al in
flow
(acr
e-fe
et)
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Albuquerque water demand growth
Source: City of Albuquerque, Public Works Dept., 1997
Endangered Species and the Rio Grande
• September 19, 2002: “A judge on Wednesday ordered federal water managers to release water earmarked for cities and irrigators to keep the Rio Grande flowing for the endangered silvery minnow.”
• October 18, 2002: “Water Release Halted. The decision by the 10th Circuit Court of Appeals means the endangered silvery minnow is on its own this autumn …. ‘That really means the end of the silvery minnow in the river.’ ”
Source: Albuquerque Journal
Endangered Species: the Rio Grande silvery minnow - distribution
Source: Desert Fishes Council
Rio Grande Basin Water Budget, Normal Year
Rio Grande Headwaters 660Conejos River (3 gages) 346 339 Colorado Ag Northern NM Mts 139Rio Chama 346 60 SeepageJemez River 45 60 EvaporationAlbuquerque M&I 60 100 Central NM Ag (MRG)Rio Puerco 32 135 Riparian VegetationRio Salado 41 180 Elephant Butte Evap
495 Southern NM Ag (EBID)140 El Paso M&I236 Texas Ag
60 Mexico Ag
Supply Demand (Depletion)
Rio Grande Model (RMA)
• Flows (instream, surface and groundwater inflows, diversions, pumping from groundwater, return flows, conveyance losses)
• Stocks (nonrenewable groundwater, reservoirs)
• Lags (shallow groundwater availability and surface recharge, riparian usage)
• Institutions
• Net economic benefits of water use by sector, region, and year (projected 40 years)
Flows at Otowi
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200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1942 1947 1952 1957 1962 1967 1972 1977 1982
Otow i-hist 8.20 - Otow i
MODEL VERIFICATION
8.22: EB Storage
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1942 1947 1952 1957 1962 1967 1972 1977 1982
EB-hist EB-stor
MODEL VERIFICATION
Drought Scenarios: 6 year future projection
• 100% of historic median flows
• 75% of median
• 50% of median
Policy scenarios
• Law of the River (do nothing)
• Intra compact water bank
• Interstate water bank
Law of the River Drought Damages
Change in Use with Intracompact Banking
Change in use between intracompact banking and interstate banking
Change in Benefits with Intracompact Banking
Change in benefits between intracompact banking and interstate banking
Specific conclusions
• Monetary drought damages are small in relation to regional economic activity
• Interstate compact results in concentrated impacts on users at the “end of the pipe.”
• Policy change can reduce 1/3 of drought damages: maybe drought will not be a catalyst for change here.
General conclusions I
• Regional (often intrastate) policy changes achieve most of the possible efficiency gains.
=> INCREASED FLEXIBILITY IN WATER ALLOCATION AT THE REGIONAL LEVEL CAN ACHIEVE MOST OF THE POSSIBLE EFFICIENCY GAINS.
General conclusions II
Interstate agricultural productivity differences lead to only modest gains from interstate water banks.
=> Interstate water banking will in many (most?) cases simply transfer agricultural activity. (Municipal demands can be met regionally.)
Interpreting aggregated models: Historic low flow days vs. annual flow
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20
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60
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180
- 500,000 1,000,000 1,500,000 2,000,000 2,500,000
Annual flow past San Acacia (acre-feet)
Nu
mb
er
of
da
ys b
elo
w 5
0 cf
s a
t S
an
Aca
cia
What is an “extreme” drought?
• Major crop/pasture losses;
• extreme fire danger; • widespread water
shortages or restrictions
• Palmer Drought Index : -4.0 to-4.9
• Soil moisture percentile: 3-5%
• Streamflow percentile: 3-5%
• Standardized Precipitation Index:-1.6 to-1.96
Source: National Drought Mitigation Center, University of Nebraska-Lincoln