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.

Impacts of the California Drought from 2007 to 2009: Surprising Outcomes for California’s Agriculture, Energy, and Environment

Pacific Institute | June 16th, 2011

California’s three-year drought, which ended with this season’s cool and wet weather, had complicated and serious impacts that have been poorly understood and reporte

California’s three-year drought, which ended with this season’s cool and wet weather, had complicated and serious impacts that have been poorly understood and reported. Some of the impacts were expected; others were surprising. The Pacific Institute has just completed a nine-month assessment of new data from California’s agricultural, energy, and environmental sectors to evaluate actual consequences of the drought for the state. Analysis of state and federal data released over the past year finds that contrary to much of the media reporting, California’s agricultural community proved flexible and resilient, generating agri­cultural revenues in 2007, 2008, and 2009 that were the highest on record. And agriculture-related occupations remained a stable portion of total jobs available in areas directly impacted by water supply restrictions. Less frequently reported were the substantial impacts on energy production and aquatic ecosystems during the drought, which were economically and environmentally significant. “More severe drought is inevitable, and the U.S. – and California in particular – has not reformed drought monitoring, evaluation, planning, and response strategies the way other countries and regions have,” said Juliet Christian-Smith, senior research associate at the Pacific Institute and lead author of the report. “To become more resilient to future droughts, it will be critical to shift from crisis-driven responses to long-term mitigation strategies.” The Pacific Institute analysis, Impacts of the California Drought from 2007-2009, focused on three drought-sensitive sectors: agricultural production, energy production, and ecosystem health.  

Innovative Ideas to Finance Resiliency in the Water Sector

Stanford University | June 3rd, 2019

Distributed, or decentralized, water systems have the potential to increase the resiliency and flexibility of freshwater supply networks by reducing the load on aging

Distributed, or decentralized, water systems have the potential to increase the resiliency and flexibility of freshwater supply networks by reducing the load on aging infrastructure, eliminating or postponing the need to replace, expand or build centralized systems, decreasing energy requirements for conveyance, and offering alternative solutions if centralized infrastructure fails. Despite these and other potential benefits, financing distributed systems remains a key barrier. To overcome this challenge, Stanford researchers have examined innovative financing models in the electricity sector, which started the transition nearly twenty years ago from a purely centralized system to a hybrid model that includes distributed energy such as wind and solar, to draw applicable lessons for the water sector.

Instream Flow Studies for the Protection of Public Trust Resources: A Prioritized Schedule and Estimate of Costs

California State Water Resources Control Board (SWRCB) | February 18th, 2011

Chapter 5 of the 2009-10 Seventh Extraordinary Session (SB X7 1, Simitian) directs the State Water Resources Control Board (State Water Board) to submit to the Legislatur

Chapter 5 of the 2009-10 Seventh Extraordinary Session (SB X7 1, Simitian) directs the State Water Resources Control Board (State Water Board) to submit to the Legislature, by December 31, 2010, a prioritized schedule and estimate of costs to complete instream flow studies for two categories of rivers and streams, by two specific deadlines: 1) high priority rivers and streams in the Delta watershed that were not covered in the Board’s “Final Report on Development of Flow Criteria for the Sacramento-San Joaquin Delta Ecosystem” by 2012; and 2) all major rivers and streams outside the Sacramento River watershed by 2018. The definition of the two stream categories is ambiguous. There are a number of tributaries that are both in the Delta watershed and outside the Sacramento River watershed, including the San Joaquin, Calaveras, Cosumnes, and Mokelumne Rivers. The State Water Board interprets the first category to mean all Delta and Sacramento River tributaries not covered under the Board’s “Final Report on Development of Flow Criteria for the Sacramento-San Joaquin Delta Ecosystem.” Two additional schedules are prioritized for “all major rivers and streams outside the Sacramento River watershed.” This report identifies 138 rivers and streams for instream flow studies. The total estimated cost to conduct scientific instream flow studies for the high priority rivers and streams tributary to the Delta is $32.46 million. The total estimated cost to conduct scientific instream flow studies for the high priority rivers and streams outside the Delta watershed is $107.25 million. The detailed schedules and costs are preceded with a few short discussions on the timelines given in the directive, the organization of schedules, the cost estimates for instream flow studies, and cost estimates for the next logical step: setting instream flow objectives.

Irrigated agricultural adaptation to water and climate variability: The economic value of a water portfolio

Journal of Agricultural Economics (Wiley) | December 1st, 2014

Increasing aridity, more frequent and intense drought, and greater degrees of water scarcity create unique challenges for agriculture. In response to these challenges, wh

Increasing aridity, more frequent and intense drought, and greater degrees of water scarcity create unique challenges for agriculture. In response to these challenges, which often manifest themselves as lower and more variable surface water supplies, as well as depleted and degraded ground water supplies, growers tend to seek opportunities to adapt. One option for growers to reduce their exposure to water scarcity and heightened uncertainty is to diversify. Indeed, access to a portfolio of supplies is one way in which water and irrigation districts, as well as individual growers, are responding to the changing landscape of water resource availability. This article evaluates the benefits to irrigated agriculture from having access to multiple sources of water. With farm-level information on 1,900 agricultural parcels across California, we use the hedonic property value method to investigate the extent that growers benefit from having access to multiple sources of water (i.e., a water portfolio). Our results suggest that while lower quality waters, less reliable water, and less water all negatively impact agricultural land values, holding a water portfolio has a positive impact on land values through its role in mitigating the negative aspects of these factors and reducing the sensitivity of agriculture to climate-related factors. From a policy perspective, such results identify a valuable adaptation tool that irrigation districts may consider to help offset the negative impacts of climate change, drought, and population increases on water supply availability and reliability.

It’s Time for States to Invest in Infrastructure

Center on Budget and Policy Priorities | August 10th, 2017

State investment in transportation, public buildings, water treatment systems, and other forms of vital infrastructure is key to creating good jobs and promoting

State investment in transportation, public buildings, water treatment systems, and other forms of vital infrastructure is key to creating good jobs and promoting full economic recovery. States should reject the flawed economic growth strategy of cutting taxes and offering corporate giveaways, and instead identify and make investments in infrastructure that provide the foundation for a strong economy. It’s a good time for states to make those investments.

Joining Forces: Innovative Co-Funding to Enhance Corporate Water Stewardship Impact in the Colorado River Basin

Pacific Institute | May 16th, 2023

The premise of this paper is that co-funding with existing and emerging funding mechanisms can help corporations tackle more complex problems at more meaningful scales in

The premise of this paper is that co-funding with existing and emerging funding mechanisms can help corporations tackle more complex problems at more meaningful scales in the Colorado River Basin and beyond. Corporations often have more flexibility than other funders, particularly federal and state agencies, in deciding how to spend their water stewardship budgets. This flexibility is an important asset, allowing funding to be deployed strategically. This white paper defines innovative co-funding as the intentional and focused use of corporate water stewardship funding alongside other funders and funding sources in new ways that expand the impact of corporate spending.

Lessons from California’s 2012–2016 Drought

American Society of Civil Engineers (ASCE) | October 1st, 2018

California’s 5-year drought has ended, even as its aftermath lingers. From 2012–2016 much or all of California was under severe drought conditions, with gre

California’s 5-year drought has ended, even as its aftermath lingers. From 2012–2016 much or all of California was under severe drought conditions, with greatly diminished precipitation, snowpack, and streamflow and higher temperatures. Water shortages to forests, aquatic ecosystems, hydroelectric power plants, rural drinking water supplies, agriculture, and cities caused billions of dollars in economic losses, killed millions of forest trees, brought several fish species closer to extinction, and caused inconvenience and some expense to millions of households and businesses. The drought also brought innovations and improvements in water management, some of which will better prepare California for future droughts. This paper summarizes the magnitude and impacts of the 2012–2016 California drought. The paper then reviews innovations arising from the drought in the larger historical context of water management in California. Lessons for California and for modern drought management are then discussed. Droughts in modern, well-managed water systems serving globalized economies need not be economically catastrophic, but will always have impacts and challenges, particularly for native ecosystems. In California and every other water system, droughts usefully expose weaknesses and inadequate preparation in water management. In this regard for California, managers of ecosystems and small rural water supplies had the most to learn.