appendix f presentation - uc davis delta...
TRANSCRIPT
1
Economic Costs & Adaptations for Alternative Delta Regulations: Appendix F
Stacy Tanaka, Watercourse Engineering
Christina Connell, UC DavisKaveh Madani, UC DavisJay Lund, UC DavisEllen Hanak, PPICJosue Medellin, UC Davis
with Richard Howitt, UC Davis
Supported with funding fromDavid and Lucile Packard
Foundation
Stephen D. Bechtel, Jr.
The Delta
2
Delta and California’s Water System
Economic effects of reducing water exportsEffects of increasing net Delta outflowsComparisons of Delta regulationsEmployment impactsConclusions
The Delta
3
CALVIN Model
Statewide intertied water systemIntegrated water management:– Reservoir reoperation– Groundwater & conjunctive use– Water conservation– Wastewater reuse– Seawater desalination– Water markets
Optimized for statewide economic benefitsHighly reviewed models and applications
4
CALVIN Model
Databases of Input & Meta- Data
HECPRM Solution Model
Surface and ground water hydrology
Environmental flow constraints
Urban values of water (elasticities)
Agricultural values of water (SWAP)
Physical facilities & capacities
Values of increased facility capacities
Conjunctive use & cooperative operations
Water operations & delivery reliabilities
Willingness-to-pay for additional water & reliability
Value of more flexible operations
Economic benefits of alternatives
Operating costs
CALVIN Economic Optimization Model:
6
Applications of CALVIN
• Regional and statewide water markets & values of new facilities (2001)
• Conjunctive use in S. California (2002)• Restoring Hetch Hetchy (2003)• Climate warming & adaptation (2003, 2005, now)• Paleodrought (2005)• Groundwater overdraft (2006)• Baja California & Colorado R. Delta (2006 - now)• Delta water supply impacts (2002, 2007- now)• Sacramento Valley Conjunctive Use (2008)
7
Does it work? 2001 Predictions
1. Water market transfers– IID – San Diego transfers – Kern–Castaic transfers– Sacramento Valley to South transfers
2. CCWD-EBMUD inter-tie3. No major new surface storage4. More conjunctive use development5. CRA conjunctive use fails (2003)Only a model, “wrong, but sometimes useful.”
8
Delta Model Runs
What is the problem?Exports from the DeltaReductions in net Delta outflow
Runs reducing and ending water exportsRuns increasing net Delta outflows, but not necessarily reducing exportsModel results for 2050 conditions:
Water deliveries and shortagesWater scarcity costsOperating costsMix of water management decisions
9
Reducing Water Exports
Responds to problems with in-Delta intakesReduce physical export capacity, to zero
Agriculture
Urban
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 1000 2000 3000 4000 5000 6000Average Delta Exports (taf/yr)
Avg
Ag
Sca
rcity
(taf
/yr)
0
50
100
150
200
250
300
350
400
Avg U
rb Scarcity (taf/yr)
NE 75%R 50%R BC
10
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
RT NE 75%R 50%R BC
Avg
Tot
al C
osts
($B/
yr)
Net Operating Costs
Scarcity Costs
Reducing Water Exports
Economic costs: $1.5 - $2.2+ billion/year (2050)RT = restricted transfers
11
Reducing Water Exports
Statewide costs of partial reductions in exports
CALVIN result
CALVIN result
n = 1
n = 2.5n = 2
n = 3
0
0.2
0.4
0.6
0.8
1
0 0.2 0.4 0.6 0.8 1% Export Reduction
% No
Exp
ort E
cono
mic L
oss
12
Ending Water Exports
Water management adaptation Unfettered water market
58.4%
30.2%
8.6%
2.1% 0.8%
Surface Water
Groundw aterPumping
Agr icu ltural Re-Use
ScarcityRecycling & Desalination
South of Delta –Base Case
44.5%
25.4%
24.8%
1.7% 3.7%
Surf ace Water
Groundw aterPumping
Agr icultural Re-Use
Recycling & Desalination
Scarcity
South Delta – No Exports
13
Ending Water Exports
Employment and regional income effects in southern Central Valley
Southern Central Valley Crop Losses with
No Delta Exports* Base No Exports Reduction
Water Delivery (maf) 15.0 10.1 4.9 (29%) Irrigated Crop Acres (million acres) 3.399 2.522 0.877 (26%) Agricultural Crop revenue ($billion) 19.0 15.7 3.3
Water Scarcity Costs# ($billion) - - 0.814 Valley Crop Income ($billion) 25.5 21.1 4.4 Valley Crop Agricultural Jobs 598,000 495,000 103,000
* 2050 crop projections (in 2008 dollars). #Estimated from SWAP post-processing
14
Ending Water Exports
Reduced agricultural water deliveries
Region Base Case
(% target delivery) No Export
(% target delivery)No Export % of Base Case
CVPM 1 95.8 95.8 -0.1 CVPM 2 92.6 97.5 5.3 CVPM 3 100 100 0 CVPM 4 98.7 100 1.3 CVPM 5 94.7 99.5 5.1 CVPM 6 100 100 0 CVPM 7 94.6 95.7 1.1 CVPM 8 98.4 97.9 -0.5 CVPM 9 93.1 95.8 2.9 CVPM 10 91.9 45.4 -50.6 CVPM 11 97.9 97.4 -0.5 CVPM 12 85.5 84.9 -0.7 CVPM 13 87.7 76.2 -13.2 CVPM 14 90 39.2 -56.5 CVPM 15 90.9 75 -17.5 CVPM 16 95.2 85.3 -10.4 CVPM 17 81.8 72.2 -11.7 CVPM 18 90.1 45 -50.1 CVPM 19 91.9 52.9 -42.4 CVPM 20 90.4 63 -30.3 CVPM 21 91.3 21.4 -76.6
Total 92.5 74.3 -19.7
Sacr
amen
to
Valle
y &
Del
ta
E. San Joaquin Valley
E. Tulare Basin
W. & S. Tulare Basin
Westlands
Exchange contractors
15
Ending Water Exports
Reduced agricultural acreages (SWAP results) San Joaquin Valley Statewide
Crop Base Case No Export No Export (% of
Base Case) No Export (% of
Base Case) Alfalfa 380,413 262,442 -31.0 -18.4 Citrus 222,135 215,610 -2.9 -2.6 Cotton 589,463 373,434 -36.7 -36.7
Field Crops 294,990 128,843 -56.3 -25.8 Grains 144,921 34,271 -76.4 -39.8
Orchards 766,653 713,414 -6.9 -3.8 Pasture 179,452 133,541 -25.6 -12.8 Raisins 26,287 25,293 -3.8 -3.8
Rice 6,278 5,184 -17.4 0.3 Sugar Beet 36,485 28,919 -20.7 -15.6
Table Grapes 17,184 17,021 -1.0 -1.0 Tomato 245,225 144,664 -41.0 -23.6
Truck Crops 398,661 356,093 -10.7 -8.3 Wine Grapes 91,451 83,671 -8.5 -4.4
Total 3,399,598 2,522,400 -25.8 -15.3
16
0
500
1000
1500
2000
2500
3000
Avg
Del
ta O
utflo
w (ta
f/mon
)
SurplusRequired
Nov DecOct Jan Feb Mar Apr May Jun Jul Aug Sep
Increasing Net Delta Outflows
Allows exports to continue with water purchased upstreamIncrease minimum monthly Delta outflow
Monthly required flows increase with each run
17
Increasing Net Delta Outflows
Water Scarcity and scarcity costs
Agriculture
Urban
02,0004,000
6,0008,000
10,00012,000
14,00016,00018,000
20,000
5,000 10,000 15,000 20,000 25,000Average Required Delta Outflows (taf/yr)
Avg
Ag S
carc
ity (t
af/y
r)
0
50
100
150
200
250
300
Avg Urban Scarcity (taf/yr)
BC 1000MNDO 2218MNDO1600MNDO
Agriculture
Ur ban
Statewide
0
500
1,000
1,500
2,000
2,500
3,000
5,000 10,000 15,000 20,000 25,000Ave rage Re quired Delta Outflows (taf/yr)
Avg
Scar
city
Cos
t ($M
/yr)
BC 1000MNDO 2218MNDO1600MNDO
18
Increasing Net Delta Outflows
Total economic costs
0
1,000
2,000
3,000
4,000
5,000
6,000
BaseCase
250 500 700 1000 1200 1400 1500 1600 1909 2064 2218
Avg
Cost
s ($
M/y
r)
Net Operating Costs
Scarcity Costs
Minimum monthly outflow (taf)
19
Increasing Net Delta Outflows
58.1%
31.9%
0.1%7.1%
2.9%
Surface WaterGroundw ater
Pumping
Agricultural Re-Use
ScarcityRecycling & Desalination
North of Delta – Base Case
16.3%
23.3%
0.5%2.5%
57.5%Surface Water
Agricultural Re-Use
Scarcity
Recycling & Desalination
Groundw aterPumping
North of Delta – 1909 taf per month MNDO
58.5%
30.1%
0.8%2.1%
8.5%
Surface Water
Agricultural Re-Use
ScarcityRecycling & Desalination
Groundw aterPumping
South of Delta – Base Case
40.8%
25.5%
31.7%1.0% 1.0%
Surface Water
Agricultural Re-Use
Scarcity
Recycling & Desalination
Groundw aterPumping
South of Delta – 1909 taf per month MNDO
Water management adaptation
20
Comparing Delta Regulation Strategies
Regulation strategies have different costs & effects
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
0 1 2 3 4 5 6Ave rage De lta Exports (maf/yr)
Avg
Net C
ost (
$B/y
r) Minimum Delta Outflow Requirement
Reduced Export Requirement
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
13 15 17 19 21 23 25 27Average Delta Outflow (maf/yr)
Avg
Net C
ost (
$B/y
r)
Minimum Delta Outflow Requirement
Reduced Export Requirement
21
Comparing Delta Regulation Strategies
Regulate exports based on objectives
0
1
2
3
4
5
6
7
13 15 17 19 21 23 25 27Ave rage De lta Outflow (ma f/yr)
Avg
Delta
Exp
orts
(maf
/yr) Minimum Delta Outflow Requirement
Reduced Export Requirement
22
ConclusionsEnding exports is possible, but costly $1.5 - 2.3+B/yr
Ending exports not catastrophic statewide, but is for parts of southern Central Valley agricultural economy
Shortages are felt more by agriculture, as cities buy all they can. Larger shortages get cities too
Water conservation, wastewater reuse, and seawater desalination help some
Reducing exports is an economically costly way to increase net Delta outflows
Reduces economic surplus for other purposes
23
Questions?
Research Brief, main report, technical appendices, animations, and spreadsheets available at: www.ppic.org
24
N. or S.of Delta Name
No Exports
Base Case
Conveyance Facilities North Freeport Project 7 0 North Mokelumne River Aqueduct 274 0 South New Don Pedro Intertie 863 252 South Hetch Hetchy Aqueduct 1365 480 South EBMUD-CCWD Intertie 21 0 South Hayward Intertie 766 161 South Jones Pumping Plant 1880 0 South Banks Pumping Plant 1885 3 South Cross Valley Canal 224 1 South Friant-Kern Canal 7 0 South Coastal Aqueduct 0 1371 South Colorado River Aqueduct 1011 362
Surface Reservoirs North Shasta Lake 8 8 North Clair Engle Lake 3 3 North Lake Oroville 12 15 North Thermalito Afterbay 4 9 North New Bullards Bar Res 17 18 North Englebright Lake 44 44 North Folsom Lake 10 13 South New Melones Reservoir 9 9 South New Don Pedro Reservoir 17 18 South Hetch-Hetchy Reservoir 5 5 South Millerton Lake 29 6 South Lake Kaweah 166 51 South Lake Success 148 46 South Lake Skinner 27 522
Artificial Recharge Facilities South Santa Clara Valley 1873 31 South Mojave 357 392 South Antelope Valley 1715 1051
Value of Infrastructure Expansions
Marginal value of infrastructure expansion ($/AF-yr – conveyance, $/AF – storage)Selected conveyance becomes much more valuableSome recharge become much more valuable
Additional storage seems much less valuable
25
Economic Costs of Environmental Flows
Marginal value of environmental flows ($/AF)Northern environmental flows become easier
Southern environmental flows become much harder
N. or S. of Delta Location
No Exports
Base Case
Minimum Instream Flow North Trinity River 47.0 51.5 North Sacramento River 2.4 3.1 North Clear Creek 24.1 24.6 North Feather River 0.8 0.5 North Yuba River 0.5 0.6 North American River 1.2 0.9 North Mokelumne River 8.2 5.7 North Calaveras River 0 0 South San Joaquin River 277.5 54.2 South Stanislaus River 4.0 3.3 South Tuolumne River 3.9 3.5 South Merced River 60.5 29.7
Refuges North Sacramento East 1.3 4.3 North Sacramento West 0.6 4.0 South Pixley Nat’l Wildlife 168.8 50.6 South Kern National Wildlife 756.5 56.7 South San Joaquin Wildlife 601.3 35.6
Other
North Req. Net Delta
Outflow 0.4 3.8
South Delta Mendota Pool 131.2 31.7 South Owens Lake 1741.4 1101.7 South Mono Lake 2104.7 1423.7
26
Uncertainty about No Export Cost Estimates
“All models are wrong, but some are useful.”Why might costs be too high?
Desalination costs
Water scarcity/conservation costs (mostly urban)
Lower population growth
Agricultural land retirements
Why might costs be too low?
Optimization models tend to be optimistic:
– Easy water marketing – No fights over water– Perfect foresight
More agricultural land use
Higher population growth
Additional water quality costs
27
Could Ending Exports Cost Less than a Peripheral Canal?Seems unlikely, at this time.
Modeled costs of ending exports seem more likely to be low than high, on balance.
Market values of exports at $150/AF for 6 MAF/year, ending exports would cost California $900 M/yr - already exceeds estimated p.c. cost. What is Westlands paying this year?
Why would exporters pursue a p.c. if ending exports were cheaper?