Guidelines for Preparing Economic Analyses

U.S. Environmental Protection Agency (EPA) | May 30th, 2014

The Guidelines for Preparing Economic Analyses are part of a continuing effort by U.S. Environmental Protection Agency (EPA) to develop improved guidance on the preparati

The Guidelines for Preparing Economic Analyses are part of a continuing effort by U.S. Environmental Protection Agency (EPA) to develop improved guidance on the preparation and use of sound science in support of the decision-making process. This document builds on previous work first issued in December of 1983 as the Guidelines for Performing Regulatory Impact Analysis (U.S. EPA 1983) and later revised in the late 1990s. In September of 2000, the EPA issued its Guidelines for Preparing Economic Analyses (Guidelines) (U.S. EPA 2000b), revised to reflect the evolution of environmental policy making and economic analysis that had accrued over the decade and a half since the original guidelines were released. At the time of release, EPA committed to periodically revise the Guidelines to account for further growth and development of economic tools and practices. In an effort to fulfill that commitment, this document incorporates new literature published since the last revision of the Guidelines. It describes new Executive Orders (EOs) and recent guidance documents that impose new requirements on analysts, and fills information gaps by providing more expansive information on selected topics. Furthermore, a loose-leaf format has been adopted to facilitate the incorporation of new information in the future. This new, more flexible format, in addition to the electronic release of the document, will allow future updates and additions without requiring a wholesale revision of the document.

Handbook for Assessing Value of State Flood Management Investments

California Department of Water Resources (DWR) | June 1st, 2014

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, a

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, and local flood management agencies have worked for decades to reduce the risk and consequences of flooding in the State. The people of California have shown that they understand the increasing flood risk due to population growth, environmental concerns, climate change, and land use practices, and they are willing to invest in flood risk management projects. This requires the public agencies responsible for California’s flood risk management to demonstrate the value of those investments both before and after they are implemented. This Handbook for Assessing Value of State Flood Management Investments (HAV) supports that effort.

Handbook for Assessing Value of State Flood Management Investments

California Department of Water Resources (DWR) | June 8th, 2014

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, and local

Millions of people and over half a trillion dollars in assets are exposed to flood risk in California (DWR 2013a). This remains the case even as State, federal, and local flood management agencies have worked for decades to reduce the risk and consequences of flooding in the State. The people of California have shown that they understand the increasing flood risk due to population growth, environmental concerns, climate change, and land use practices, and they are willing to invest in flood risk management projects. This requires the public agencies responsible for California’s flood risk management to demonstrate the value of those investments both before and after they are implemented. This Handbook for Assessing Value of State Flood Management Investments (HAV) supports that effort. The California Department of Water Resources (DWR) has identified foundational goals that shape the State’s water management investment strategy. Those goals are: Improving public safety Fostering environmental stewardship Supporting economic stability

Hexavalent Chromium Maximum Contaminant Level (MCL) Standardized Regulatory Impact Assessment (SRIA)

California State Water Resources Control Board (SWRCB) | May 4th, 2023

The Division of Drinking Water (DDW) of the State Water Resources Control Board (State Water Board) is responsible for adopting drinking water standards. Primary drinking

The Division of Drinking Water (DDW) of the State Water Resources Control Board (State Water Board) is responsible for adopting drinking water standards. Primary drinking water standards, as defined in section 116275 of the California Safe Drinking Water Act (Health & Safety Code (HSC), div. 104, pt. 12, ch. 4, section 116270 et seq.), must be set in accordance with the requirements of HSC 116365. The purpose of the proposed regulation addressed in this Standardized Regulatory Impact Assessment (SRIA) is to adopt a primary drinking water standard for hexavalent chromium in drinking water consisting of a maximum contaminant level (MCL) and pertinent monitoring and reporting requirements. Consistent with title 1 of the California Code of Regulations (CCR), section 2003(a), the economic impact method used for the assessment was the Regional Input-Output Modeling System (RIMS II) developed by the U.S. Bureau of Economic Analysis (BEA).

Historical Expenditures and Current and Future Funding Needs

California Department of Water Resources (DWR) | December 13th, 2018

This document supports information contained in the California Water Plan Update 2018. The purpose of this document is to provide a description of California’s water re

This document supports information contained in the California Water Plan Update 2018. The purpose of this document is to provide a description of California’s water resources management historical expenditures and the existing funding needs in the State. The historical expenditure data includes capital and ongoing public agencies’ (State, local, and Federal agencies) historical expenditures. Historical expenditure data is organized by management action type and water sectors. In this document, capital management actions include infrastructure development, repair, replacement or rehabilitation. Ongoing actions include planning, data management, tracking and reporting, operations, and maintenance. Historical expenditure data is provided for State fiscal year 2005/2006 (2006) to 2014/2015 (2015). This timeframe was selected due to data availability at the local, State, and Federal levels. This document also provides information on the accrued interest on debt from State general obligation (GO) bonds.  This document provides information pertaining to the projected existing water management funding needs and existing water management funding gap. Projected water management funding need was estimated from planned and proposed management actions collected from State, local, and Federal agencies.  Historical expenditure and funding need information is used in the California Water Plan Update 2018 to provide context and data for inclusion into the funding analysis, described in the Funding Scenario Analysis supporting document. 

Hydro-economic analysis of groundwater pumping for irrigated agriculture in California’s Central Valley, USA

Hydrogeology Journal (Springer) | July 12th, 2015

As in many places, groundwater in California (USA) is the major alternative water source for agriculture during drought, so groundwater’s availability will drive some i

As in many places, groundwater in California (USA) is the major alternative water source for agriculture during drought, so groundwater’s availability will drive some inevitable changes in the state’s water management. Currently, agricultural, environmental, and urban uses compete for groundwater, resulting in substantial overdraft in dry years with lowering of water tables, which in turn increases pumping costs and reduces groundwater pumping capacity. In this study, SWAP (an economic model of agricultural production and water use in California) and C2VISim (the California Department of Water Resources groundwater model for California’s Central Valley) are connected. This paper examines the economic costs of pumping replacement groundwater during drought and the potential loss of pumping capacity as groundwater levels drop. A scenario of three additional drought years continuing from 2014 show lower water tables in California’s Central Valley and loss of pumping capacity. Places without access to groundwater and with uncertain surface-water deliveries during drought are the most economically vulnerable in terms of crop revenues, employment and household income. This is particularly true for Tulare Lake Basin, which relies heavily on water imported from the Sacramento-San Joaquin Delta. Remote-sensing estimates of idle agricultural land between 2012 and 2014 confirm this finding. Results also point to the potential of a portfolio approach for agriculture, in which crop mixing and conservation practices have substantial roles.

Hydro-economic models: Concepts, design, applications, and future prospects

Journal of Hydrology (Elsevier) | September 15th, 2009

Future water management will shift from building new water supply systems to better operating existing ones. The variation of water values in time and space will

Future water management will shift from building new water supply systems to better operating existing ones. The variation of water values in time and space will increasingly motivate efforts to address water scarcity and reduce water conflicts. Hydro-economic models represent spatially distributed water resource systems, infrastructure, management options and economic values in an integrated manner. In these tools water allocations and management are either driven by the economic value of water or economically evaluated to provide policy insights and reveal opportunities for better management. A central concept is that water demands are not fixed requirements but rather functions where quantities of water use at different times have varying total and marginal economic values. This paper reviews techniques to characterize the economic value of water use and include such values in mathematical models. We identify the key steps in model design and diverse problems, formulations, levels of integration, spatial and temporal scales, and solution techniques addressed and used by over 80 hydro-economic modeling efforts dating back 45 years from 23 countries. We list current limitations of the approach, suggest directions for future work, and recommend ways to improve policy relevance.

Hydroeconomic modeling of sustainable groundwater management

American Geophysical Union (AGU) | March 23rd, 2017

In 2014, California passed legislation requiring the sustainable management of critically over-drafted groundwater basins, located primarily in the Central Valley agricu

In 2014, California passed legislation requiring the sustainable management of critically over-drafted groundwater basins, located primarily in the Central Valley agricultural region. Hydroeconomic modeling of the agricultural economy, groundwater, and surface water systems is critically important to simulate potential transition paths to sustainable management of the basins. The requirement for sustainable groundwater use by 2040 is mandated for many overdrafted groundwater basins that are decoupled from environmental and river flow effects. We argue that, for such cases, a modeling approach that integrates a biophysical response function from a hydrologic model into an economic model of groundwater use is preferable to embedding an economic response function in a complex hydrologic model as is more commonly done. Using this preferred approach, we develop a dynamic hydroeconomic model for the Kings and Tulare Lake subbasins of California and evaluate three groundwater management institutions—open access, perfect foresight, and managed pumping. We quantify the costs and benefits of sustainable groundwater management, including energy pumping savings, drought reserve values, and avoided capital costs. Our analysis finds that, for basins that are severely depleted, losses in crop net revenue are offset by the benefits of energy savings, drought reserve value, and avoided capital costs. This finding provides an empirical counter example to the Gisser and Sanchez Effect.

Identifying the Amount of Wastewater that is Available and Feasible to Recycle in California

Water Research Foundation (WRF) | July 24th, 2023

Impacts of California’s Five-Year (2012-2016) Drought on Hydroelectricity Generation

Pacific Institute | April 13th, 2017

The severe hydrological drought afflicting California between 2012 and 2016 has ended, with an extremely wet winter beginning in October 2016. That five-year per

The severe hydrological drought afflicting California between 2012 and 2016 has ended, with an extremely wet winter beginning in October 2016. That five-year period was the driest and hottest in the instrumental record going back to the late 1800s. Impacts on communities, ecosystems, farmers, and the economy were widespread but have been unevenly distributed. The Pacific Institute has regularly analyzed the consequences of California droughts, beginning with comprehensive assessments of the 1987-1992 drought (Gleick and Nash 1991, Nash 1993), the 2007-2009 drought (Christian-Smith et al. 2011), and this most recent drought (Cooley et al. 2015, Gleick 2015, Cooley et al. 2016, Feinstein et al. 2017). This analysis is the third assessment of the impacts of the drought on hydropower production and greenhouse gas emissions from California’s energy sector (Gleick 2015, Gleick 2016). This analysis finds that during the five years ending September 30, 2016 (the end of the 2016 “water year”), hydropower generation was substantially below average, and the associated economic cost to California ratepayers was approximately $2.45 billion dollars. The additional combustion of fossil fuels for electricity generation also led to a 10 percent increase in carbon dioxide emissions from California’s in-state power plants (CARB 2015) along with increased emissions of other pollutants.