An actionable hydroeconomic Decision Support System for the assessment of water reallocations in irrigated agriculture. A study of minimum environmental flows in the Douro River Basin, Spain.

Despite major recent advances in socio-hydrology and hydroeconomics research, interdisciplinary methods and models for water policy assessment remain largely concealed to the academic arena. Most river basin authorities still base decision-making on inputs from hydrologic Decision Support Systems (DSS), and have limited information on the economic costs that water policies may impose on the economy. This paper presents a time-variant hierarchical framework that connects a hydrologic module and an economic module by means of two-way feedback protocols. The hydrologic module is designed to fit the AQUATOOL DSS, the hydrologic model used by Spanish river basin authorities to inform decision-making at a basin scale; while the economic module is populated with a Positive Multi-Attribute Mathematical Programming (PMAMP) model that represents the behavior and adaptive responses of irrigators. The proposed hierarchical framework is used to assess the economic repercussions of strengthening irrigation quotas so to achieve minimum environmental flows in the Douro River Basin (Spain) under climate change. Results show that reductions in agricultural water allocations to meet environmental flow requirements create nonlinear incremental profit and employment losses in irrigated agriculture that are on average low to moderate (between -4% and -12.9 % for profit, and between -4.6 % and -12 % for employment, depending on the scenario). During extreme droughts, the abrupt reductions in water availability and agricultural allocations can test farming systems past the breaking point and lead to catastrophic profit and employment losses (>80 %).

To charge or to cap in agricultural water management. Insights from modular iterative modeling for the assessment of bilateral micro-macro-economic feedback links.

This paper develops an iterative micro-macro-economic modeling framework to assess agricultural water management policies including feedbacks between local and economy-wide impacts. The main contribution of the paper is the introduction of a set of bidirectional protocols that work through land use and price changes to model the bilateral feedbacks between the micro and macro scales. The proposed framework is applied to the Castile and León Region in Spain, where we assess the performance of two alternative water conservation policies (charges and caps) and compare results to those obtained using a conventional stand-alone microeconomic model. We find that, as compared to the proposed modular framework, the assessment of water conservation policies using conventional stand-alone microeconomic models is expected to overestimate water conservation and underestimate economic performance. Overall, our results suggest that water conservation targets can be achieved with lower economic losses than those anticipated by conventional stand-alone microeconomic models.

An ensemble experiment of mathematical programming models to assess socio-economic effects of agricultural water pricing reform in the Piedmont Region, Italy.

The Piedmont Region in NW Italy has recently deployed an ambitious and pioneering agricultural water pricing reform aimed at integrating and effectively enforcing EU's Water Framework Directive principles of cost recovery, polluter-pays and affordability. This paper develops a multi-model ensemble framework encompassing 5 mathematical programming models (2 Positive Mathematical Programming models, 2 Positive Multi-Attribute Utility Programming models and 1 Weighted Goal Programming model) that represent the observed behavior of socioeconomic agents to: 1) simulate the impacts of the Piedmontese water pricing reform on land use allocation and management, water conservation, profit and water tariff revenue; 2) sample modeling uncertainty through the ensemble spread; and 3) explore potential tipping points through use of scenario-discovery techniques. Our research suggests that the key challenge to the reform lies in the management of rice fields, an extensive (17% of the agricultural area), water-demanding and relatively low-added-value crop that nonetheless delivers significant ecosystem services (e.g. water retention) of historical and cultural relevance to the region. The ensemble experiment suggests that rice agriculture rapidly dwindles in the price range 0.012-0.074 EUR/m3 depending on the model. Before reaching this tipping point, agricultural water pricing can reduce withdrawals up to 1.7%-9.5%, while reducing profit between 4.9% and 5.6% and achieving a 57- to 65-fold increase in water tariff revenue.