economics of water supply, demand, and conservation in the paso del norte region frank a. ward

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Sustainability on the Border: Water, Climate, and Social Change

in a Fragile LandscapeThe University of Texas at El Paso

Economics of Water Supply, Demand, and Conservation in the Paso del Norte

RegionFrank A. Ward

NM State UniversityMay 18, 2011

12:30 – 12:50 pm

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Road Map

• Pose questions– What is water conservation in agriculture?– What policies could promote it? – Can river basin policy models help

discover these policies?– Findings about effects of water

conservation incentives in the Paso Del Norte Region

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Basin Scale ChoicesWatershed runoff

Reservoir

Irrigated crops

Flooding

Urban water supply

Groundwater

Fish and wildlife

Treaty obligation

Hydropower

Compact Obligation

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Rio Grand

e Basin

Journey down the Rio Grande

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Snow melt: 1 a-f Rio Grande Silvery Minnow

CBP pumped water Elephant Butte, Caballo

SLV Irrigation EBID Irrigation

Sangre De Cristo Headwaters El Paso urban (sw +gw)

Heron, El Vado, Abiquiu , Cochiti West TX Irrigation

Albuquerque urban (sw + gw) Mexico Ag

MRGCD Irrigation Mexico Urban

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High Valued Uses of Water in RGB, Albuquerque, El Paso

High Valued Use: Rio Grande Silvery Minnow

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High Uses of Water in RGB, Irrigation

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Approach

• Water Pricing and Cost Recovery• Timing, sizing, sequencing of new storage• Population growth, increased food demands, ‘more crop

per drop.’• Water rights adjudication• Meeting growing demands for environment• How to develop/allocate water for food security • Cheapest way to reduce water use (conservation)

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Policy Debates Basin Models Can Inform

• Maximize– Objective

• Economic• Environmental• Social Justice• Hydrologic

• Subject to – Constraints

• Hydrologic• Agronomic• Institutional• Economic

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Basin Model (Optimization)

Policy Assessment Framework

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Data

Headwater supplies

Min FlowsSharing rulesOutflows

Crop pricesCrop costsWater priceTreat costElasticitiesLand supply

Outcomes

Crop prodnCrop ET

Urban water diversions, use,Return flows,Flows by gauge

Urban, farm, environmental benefits

NPV

Baseline: no new policy

Alt 1: Constrain aquifers to return to start

Alt 2: Renew aquifers to historical levels

Policy

Connections• Connections: River basin models

– Hydrologic: stocks, flows, over time, space– Economic: optimizes total benefits from use– Agronomic: acreage, water use, crops– Demographic: urban income, population,

demand– Institutional: rules that limit use or require

delivery

• Gain insights into policies that best adapt to climate: resilient conservation institutions – For basin as a whole (or part, e.g. Paso del Norte

Region )– For targeted users (farm, city, environment)

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Water Balance

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Crop Water Use Data, RG Basin, NM

Crop Tech

A ET DP

Yield tons/a

cTech

A ET DPYield

tons/acac-ft/ac/yr ac-ft/ac/yr

Alfalfa f 5.0 2.2 2.9 8.0 d 2.7 2.7 0.0 10.0

Cotton f 2.8 1.2 1.6 0.4 d 1.5 1.5 0.0 0.5

Lettuce f 2.5 1.1 1.4 12.5 d 1.4 1.4 0.0 15.6

Onions f 4.0 2.3 1.7 16.9 d 2.9 2.9 0.0 21.1

Sorghum f 2.0 0.9 1.1 2.0 d 1.1 1.1 0.0 2.5

Wheat f 2.5 1.1 1.4 4.6 d 1.4 1.4 0.0 5.8Green Chile f 4.6 2.0 2.6 11.0 d 2.5 2.5 0.0 13.8Red Chile f 5.0 2.2 2.9 1.7 d 2.7 2.7 0.0 2.2Pecans f 6.0 2.6 3.4 0.6 d 3.2 3.2 0.0 0.7

NM Pecans: Water Balance

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Drip 6’

2.6’

3.4’

Flood

3.2’ 3.2’

0

0

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A Peek at the Model

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Objective

(1 ) (1 )ut ett t

u t e tu e

NBu NBeMax NPV

r r

• Irrigable land, Headwater supplies• Sustain key ecological assets• Hydrologic balance• Reservoir starting levels (sw, gw)• Reservoir sustainability constraints (sw, gw)• Institutional

– Endangered Species Act

– Rio Grande Compact (CO-NM; NM-TX)

– US Mexico Treaty of 1906

– Rio Grande Project water sharing history (NM/TX)

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Constraints

• E.g.: Lobatos gauge (CO-NM border): X(Lobatos_v,1) = X(RG_h,1) - X(SLV_d,1) + X(SLV_r,1)

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hv ht vv dvh v d

vt vt dt

rt LLr L

trv v

B X B BX X X

XB B X

Gauged Flows: Hydro Balance

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( , , ,...)

ut uck ucktc k

X B L

u irrigated region

c crop

k irrigationtech flood drip pivot

Ag water use

•Ag Water Use and Savings–Water Supply (normal, dry, drought)

–Ag water Conservation Subsidies (low to high)

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Results of Ag Water Conservation Policy Analysis

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Water Use by Technology and Policy

LRGB (AF/yr, ET)

Tech UnitsBase

Alternative 1: Sustaining

Natural Capital

Alternative 2: Renewing Natural

Capital

use use change use change

Floodabsolute 146,266 94,917 -51,349 94,375 -51,891

pct 100 65 -35 65 -35

Dripabsolute 52,604 4,402 -48,202 1 -52,602

pct 100 8 -92 0 -100

Totalabsolute 198,869 99,318 -99,551 94,376 -104,493

pct 100 50 -50 47 -53

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Economic Value of Water by Water Shortage and Drip Irrigation Subsidy, Rio Grande Project, USA, $ / Acre Foot for Water Depleted

Water Supply Scenari

o

% Capital Subsidy, Drip Irrigation

0 25 50 75 100

normal 0.00 8.53 17.07 25.60 34.13

dry 52.50 60.05 68.59 77.35 86.58

drought142.8

5 146.83 154.48 162.16 170.13

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Lessons Learned: Ag Water Conservation

• Farmers seek income, not conservation. Conservation must be profitable for irrigators to do it. – Subsidizing water conserving irrigation

technology will reduce water applied per unit land for a given crop

– Reduced water applied doesn’t always reduce water depleted by crops, esp if yields increase

– Requiring sustainable reservoirs and aquifers in NM can reduce the use of drip irrigation.

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Policies that promote sustainable water use in Paso Del Norte Area

• Complete water rights adjudications: provides clear definition of water rights – Surface water. Esp important in droughts

– Groundwater. Limits unsustainable pumping

• Remove restrictions on water trading• Trading and water pricing

– Two tiered urban pricing: promotes conservation

– Publicize water prices

– Publicize water right prices

– All signal cost of using water for low valued uses

• Guard against weak conservation programs

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Lessons Learned: Research Challenges

• Water conservation is hard to define, measure, forecast, evaluate, alter.

• Counterfactual: How much less water would have been (will be) used if X irrigation technology would have been (is) subsidized.

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Top 10 Lies told by Watershed Policy Modelers

1. The model is well-documented with all limits

2. The model is user-friendly

3. The model fits the data

4. Results make sense

5. The model does that

6. We did a sensitivity analysis

7. Anyone can run this model

8. This model links to other models

9. The model will be in the public domain

10. The new version fixes all previous problems