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Efficiency, equity, and sustainability in a water quantity-quality optimization model in the Rio Grande basin

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  • Ward, Frank A.
  • Pulido-Velázquez, Manuel

Abstract

Integrated hydrologic and economic optimization models at the basin scale provide a framework for policy design, implementation, and evaluation in water-stressed basins. Despite the considerable potential that basin scale analysis offers, few basin-wide studies have examined tradeoffs among efficiency, equity, and sustainability when analyzing the design of water resource programs. This paper develops a basin scale framework to identify hydrologic and economic impacts of alternative water pricing programs that comply with environmental regulations for protecting water quality. Key issues are examined that confront integrated hydroeconomic basin models: linking water and economics, spatial and temporal scale integration, and quantity-quality relationships. Economic efficiency is defined and measured for each of two urban water pricing arrangements that comply with urban water quality protection regulations. Alternative measures of equity are analyzed in both spatial and temporal dimensions. Sustainability is evaluated physically for protecting the water supply and financially for long-term revenue viability. The approach is illustrated from results of a dynamic nonlinear programming optimization model of water use in North America's Rio Grande basin. The model optimizes the net present value of the basin's total economic benefits subject to constraints on equity, sustainability, hydrology, and institutions. It is applied to assess impacts of a two-tiered pricing program that complies with recently implemented drinking water quality standards for the basin's two largest U.S. cities: Albuquerque, New Mexico, and El Paso, Texas. Results suggest that two-tiered pricing of urban water supply has considerable potential to perform well in meeting the aims of efficiency, equity, and sustainability. Findings provide a general framework for designing water pricing programs that comply with environmental regulations.

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  • Ward, Frank A. & Pulido-Velázquez, Manuel, 2008. "Efficiency, equity, and sustainability in a water quantity-quality optimization model in the Rio Grande basin," Ecological Economics, Elsevier, vol. 66(1), pages 23-37, May.
    • Handle: RePEc:eee:ecolec:v:66:y:2008:i:1:p:23-37
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    2. Zhi-Hua Wang & Rachel von Gnechten & David A. Sampson & Dave D. White, 2019. "Wastewater Reclamation Holds a Key for Water Sustainability in Future Urban Development of Phoenix Metropolitan Area," Sustainability, MDPI, vol. 11(13), pages 1-13, June.
    3. Tran, Dat Q. & Kovacs, Kent & Wallander, Steven, 2020. "Optimal groundwater augmentation through managed aquifer recharge and on-farm reservoir under uncertainty and risk," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304295, Agricultural and Applied Economics Association.
    4. Rupérez-Moreno, Carmen & Senent-Aparicio, Javier & Martinez-Vicente, David & García-Aróstegui, José Luis & Calvo-Rubio, Francisco Cabezas & Pérez-Sánchez, Julio, 2017. "Sustainability of irrigated agriculture with overexploited aquifers: The case of Segura basin (SE, Spain)," Agricultural Water Management, Elsevier, vol. 182(C), pages 67-76.
    5. Ghosh, Sanchari & Willett, Keith D., 2021. "Water Permit Trading for reservoir water under competing demands and downstream flows," 2021 Annual Meeting, August 1-3, Austin, Texas 313858, Agricultural and Applied Economics Association.
    6. Mohammad R. Zolfaghari & Elnaz Peyghaleh, 2015. "Implementation of Equity in Resource Allocation for Regional Earthquake Risk Mitigation Using Two‐Stage Stochastic Programming," Risk Analysis, John Wiley & Sons, vol. 35(3), pages 434-458, March.
    7. Frank Ward & Manuel Pulido-Velazquez, 2012. "Economic Costs of Sustaining Water Supplies: Findings from the Rio Grande," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(10), pages 2883-2909, August.
    8. Gürlük, Serkan & Ward, Frank A., 2009. "Integrated basin management: Water and food policy options for Turkey," Ecological Economics, Elsevier, vol. 68(10), pages 2666-2678, August.
    9. Brouwer, Roy & Hofkes, Marjan, 2008. "Integrated hydro-economic modelling: Approaches, key issues and future research directions," Ecological Economics, Elsevier, vol. 66(1), pages 16-22, May.
    10. Akgün, Aliye Ahu & van Leeuwen, Eveline & Nijkamp, Peter, 2012. "A multi-actor multi-criteria scenario analysis of regional sustainable resource policy," Ecological Economics, Elsevier, vol. 78(C), pages 19-28.
    11. Pande, Saket & van den Boom, Bart & Savenije, Hubert H.G. & Gosain, Ashvani K., 2011. "Water valuation at basin scale with application to western India," Ecological Economics, Elsevier, vol. 70(12), pages 2416-2428.
    12. Lina Zhang & Xiaoling Zhang & Fengping Wu & Qinghua Pang, 2020. "Basin Initial Water Rights Allocation under Multiple Uncertainties: a Trade-off Analysis," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 34(3), pages 955-988, February.
    13. Gohar, Abdelaziz A. & Ward, Frank A., 2010. "Gains from expanded irrigation water trading in Egypt: An integrated basin approach," Ecological Economics, Elsevier, vol. 69(12), pages 2535-2548, October.
    14. Bell, Andrew & Zhu, Tingju & Xie, Hua & Ringler, Claudia, 2014. "Climate–water interactions—Challenges for improved representation in integrated assessment models," Energy Economics, Elsevier, vol. 46(C), pages 510-521.

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