Integrated Hydrologic - Economic Modeling of River Basins ode g o e as s
Claudia RinglerClaudia RinglerIFPRI
UCD/Embrapa
An Example of a Typical River Basin…
PrecipitationFishing
River Basin BoundaryIndustry U b
Hydropowerg
Forest
Rura
Runoff
Reservoir
dust y Urban WSS
Recreation
Rainfed AgrRural WSS
IrrigationReturn Flow
Navigation
Recreation
Infiltration / Recharge
Groundwater InflowCommunity Use
LivestockGroundwater
Infiltration / Recharge
Base Flow / PumpingWetlands / Environ
UCD/EmbrapaOcean
Irrigation…there is a need to understand how one use/r affects other uses and users… Groundwater Outflow
Figure based on Rao 2005
Growing Intersectoral Competition
CHANGET h l iGROWTH
Agr
- Technologies- Environment
GROWTH- Economy- Population- Urbanization
QuantityQuality
Ind Dom
EnvENVIRONMENT
social ENVIRONMENT- social- legal- political- institutional
ENVIRONMENT- physical- technical- economic
UCD/Embrapa
- institutional
Economics versus Engineering in Basin Models
• Hydrologic simulation models are important for real-time operation of dams & river systems
Models
real-time operation of dams & river systems
• Economic optimization models are important for investment calculationsinvestment calculations
• Optimization in simulation models is generally f li i d f ll i b dof limited use for water allocation based on
economic efficiency purposes
• Economic models without sufficient hydrologic representation is also of limited use
UCD/Embrapa
• Joint hydrologic-economic models can be used for strategic decision-making in river
Engineering-Economic Issues
UCD/Embrapa
Engineering-Economic Issues
UCD/Embrapa
W t
Physical
W t
SocialEnvironmentGeography
Geology Politics Economics S i lWater
DemandWater Resources
gyClimatology Meteorology Ecology
Sociology Law Institutions …..
Water Resources Management
Hydrology…….
g
Control (Hard) Technology Adaptive (Soft) Technology
Water Supply
Flood Control
Hydro Power
... Fees Taxes
Water Rights
Subsi-dies
...
UCD/Embrapa
SolutionsFeedbacks
Model Structure
Institutional Norms / Economic Incentives
Maximization of net benefitsRiver BasinH d l i t ti
Crop production/ Irrigation profits
Hydrologic system operation
Instream uses•Power generation
Off-streamuses
Domestic Benefits
Hydrop. Profits
•Salinity control
D&I Irrigation
Ground-water
IndustrialProfits
On-Farm water distribution
g
UCD/EmbrapaHydrology / Supply Side Economics / Demand Side
Compartment Modeling vs. Holistic Modeling
i H d l i b d lHydrologic sub-model Hydrologic sub-model
Inter-relationships
E i b d l
Data exchangesEconomic sub-model
p
Economic sub-model
• Production function with water as an input• Environmental value (benefit) function • Investment/cost function: investment/cost
UCD/Embrapa
Investment/cost function: investment/cost infrastructure water yields
outflow Downstream economic
Precipitation Other sourcesRunoff
inflow
River reaches & reservoirsinstream uses : hydropower, recreation, anddilution
diversion offstream uses
return flowaquifer-riverinter-flow
evapotranspiration
and environmentalrequirements
Consumptiveuse
Distributionsystem
surface drainage
evapotranspiration& other comsumptiveuse
i it ti
Industrial & municipal
demand sites
Agriculturaldemand sites
water
drainagedisposal/treatment
reuseprecipitation
Treatment
surface waterindustry
demand sites
seepageGroundwater
pumping
groundwatergroundwater
spillage loss
percolationtail water
pumpingDrainage collectionsystem
return flowseepage
precipitation
drainage
deep percolationriver
UCD/EmbrapaGroundwater system
riverdepletion
DN0aCa1
BE1 A1DN1Node
MNSNTMPRNT IPRNTDN0a
Ca1
BE1 A1DN1Node
MNSNTMPRNT IPRNT
RIVER BASIN NETWORKRIVER BASIN NETWORK HYDROLOGY
DN0b
DN0c
Ca2 Ca3 Ca4
Ls2 Ls3 Ls4Ls1
BE1
BE2
SG1A2DN2
A14bBE2A27Ca1
MLHLD
MPLBP
revTM
NodeA22VD1 Irrigation demand site
Domestic demand siteIndustrial demand siteReservoir
MCTTN
ITHTN
revDNA14aBE2
DN0b
DN0c
Ca2 Ca3 Ca4
Ls2 Ls3 Ls4Ls1
BE1
BE2
SG1A2DN2
A14bBE2A27Ca1
MLHLD
MPLBP
revTM
NodeA22VD1 Irrigation demand site
Domestic demand siteIndustrial demand siteReservoir
MCTTN
ITHTN
revDNA14aBE2
DN1
DN2
DN3
LN1
LN2
Lu2 Lu3 Lu4Lu1
Qu2 Qu3Qu1
BE3
BE4
SG2VD1
VD3
VT1
VD2A3DN3
A4DN4
A5DN5A10LN1
A16BE4
A15BE3A15BE3A22VD1
A23aVD2
A18bSG2 A18aSG1
A19bSG4
A28Ls1
A29Lu1
MLNBP
MBBBT
MTPBT
revDT
SQMTTTN
ITHTN THC
WC
ITTTN
MTHLAMDLLD
DN1
DN2
DN3
LN1
LN2
Lu2 Lu3 Lu4Lu1
Qu2 Qu3Qu1
BE3
BE4
SG2VD1
VD3
VT1
VD2A3DN3
A4DN4
A5DN5A10LN1
A16BE4
A15BE3A15BE3A22VD1
A23aVD2
A18bSG2 A18aSG1
A19bSG4
A28Ls1
A29Lu1
MLNBP
MBBBT
MTPBT
revDT
SQMTTTN
ITHTN THC
WC
ITTTN
MTHLAMDLLD
DN4DN5
DN6
DN7
LN3
LN4
LN5
LN6
DN8
BE5
BE6
SG3
SG4
VD3
VD4VT2
Ct2 Ct3Ct1A8aDN8
A6DN6
A7DN7
A9DN9a A11LN2
A13bBE1
A17BE5
A19cSG5
A20aSG7
A23bVD3
A25VT1
A20cSG9A30Qu1
A31Ct1
revSQ
MPTBTA13cBE1A13aBE1
A8bDN8 A8cDN8
A19dSG6A19aSG3 revHT
revDmi
ECITTTN
MTTLA A9DN9b
IPTBT
DN4DN5
DN6
DN7
LN3
LN4
LN5
LN6
DN8
BE5
BE6
SG3
SG4
VD3
VD4VT2
Ct2 Ct3Ct1A8aDN8
A6DN6
A7DN7
A9DN9a A11LN2
A13bBE1
A17BE5
A19cSG5
A20aSG7
A23bVD3
A25VT1
A20cSG9A30Qu1
A31Ct1
revSQ
MPTBTA13cBE1A13aBE1
A8bDN8 A8cDN8
A19dSG6A19aSG3 revHT
revDmi
ECITTTN
MTTLA A9DN9b
IPTBT
LN7DN8
DN10
SG4
SG5
VD5
Ph2 Ph3Ph1
Di2 Di3Di1
A12aLN3
A13aLN4
A24VD4
A32Ph1
MTDBD
DN9A21aDN10 A12bLN3
A21bDN10
A21cDN10
A20bSG8A20dSG10
A13bLN4
MXLDN
ITDBD
revTArevTA
MTTLA
ITHLA
A9DN9b
IDABD
MDABD
LN7DN8
DN10
SG4
SG5
VD5
Ph2 Ph3Ph1
Di2 Di3Di1
A12aLN3
A13aLN4
A24VD4
A32Ph1
MTDBD
DN9A21aDN10 A12bLN3
A21bDN10
A21cDN10
A20bSG8A20dSG10
A13bLN4
MXLDN
ITDBD
revTArevTA
MTTLA
ITHLA
A9DN9b
IDABD
MDABD
DN11
DN12
DN13
DN14
SG6
VD6VT3
VD7Ray2 Ray3Ray1
A26aVD5A26bVT2
A33Di1
A34Ray2A36bDN12
MBHDN
MTDBDMTDHC
MHTBT
IBHDN
ITDHC
A36aDN11
MCDBVA34Ray1
DN11
DN12
DN13
DN14
SG6
VD6VT3
VD7Ray2 Ray3Ray1
A26aVD5A26bVT2
A33Di1
A34Ray2A36bDN12
MBHDN
MTDBDMTDHC
MHTBT
IBHDN
ITDHC
A36aDN11
MCDBVA34Ray1
UCD/EmbrapaDN16
DN15 Xoai2 Xoai3Xoai1
A35Xoai1
A36bDN12
MBRBVIBRBV
A36dDN14
A36cDN13
MCDBV
DN16
DN15 Xoai2 Xoai3Xoai1
A35Xoai1
A36bDN12
MBRBVIBRBV
A36dDN14
A36cDN13
MCDBV
Economics – Benefit Functions Relating Water to Off-stream or Instream use
p(w) p (w ) (w/w )α (i d d f ti )M&I Water Uses -
p(w) = p0(w0) (w/w0)α (inverse demand function)
( ) wpwwwwpwVMw
= ∫ /)()( α
VM benefit from M&I water use (US$),
( ) wpwwwwpwVMw
⋅−⋅= ∫0
000 /)()(
w0 normal water withdrawal (m3)p0 willingness at w0 (US$)e price elasticity, α=1/e 400
500
n U
S$)
e price elasticity, α 1/ewp water price
100
200
300
Ben
efit
(mill
ion
UCD/Embrapa
00 200 400 600 800 1000 1200 1400 1600
Water withdrawal (million m3)
B
Economics – Benefit Functions Relating Water to Off-stream or Instream use
wawaayy
y a ln321 +⋅+== Yield as function of water, salinity, and i i ti t h l i
Crop Yield Function
ym
cbubba 3211 ++=
cbubba 6542 ++=
irrigation technology, a regression based on model experiments.
6542
cbubba 9873 ++=
w water application relative to crop ETCUC=0.7 CUC=0.8 CUC=0.9
s 0 3 s 0 7 s 1 2pp p
c salt concentration in water application (dS/m)u Christiensen Uniformity Coefficient (CUC).
0 6
0.8
1m
ax. c
rop
yiel
d
0 6
0.8
1
max
. cro
p yi
eld
s=0.3 s=0.7 s=1.2
0.2
0.4
0.6
Yiel
d re
lativ
e to
m
0.2
0.4
0.6
Yiel
d re
lativ
e to
UCD/Embrapa
00 1 2 3 4
Water relative max. crop ET
00 1 2 3 4
Water relative to max. crop ET
Economics – Benefit Functions Relating Water to Off-stream or Instream use
⎥⎤
⎢⎡
⎥⎤
⎢⎡
⎥⎥⎤
⎢⎢⎡
m xx 1131211 γγγγ
Alternative Crop Yield Function
[ ]
⎥⎥⎥⎥⎥
⎦⎢⎢⎢⎢⎢
⎣⎥⎥⎥⎥
⎦⎢⎢⎢⎢
⎣
+
⎥⎥⎥⎥⎥⎥
⎦⎢⎢⎢⎢⎢⎢
⎣
=
inmnnn
m
mnn
xxxx
xxxx
x
xxx
xixxY3
2
1
321
3333231
2232221321
3
2
1
32121 ],,,,[),..,(
γγγγγγγγγγγγ
αααα
A quadratic yield function of water, investment, fertilizer, pesticides, machinery, labor, and seeds
⎦⎣⎥⎦⎢⎣ ix
15.0
)
IRINV=20$/ha IRINV=60$/ha IRINV=100$/ha
5.0
10.0
eld
(mt/h
a)
UCD/Embrapa0.0
5.0
0 0.5 1 1.5 2 2.5
Yie
Economics – Benefit Functions Relating Water to Off-stream or Instream use
Benefits from wetland uses
pdwdpdwdpdpd
wdpdwdwd
dll
dfwfdwywaVW
2
,2
,,
)(
)( ⋅−⋅⋅=
∑
∑∑ β
pdwdpdwdpd
dlwlw ,2
, )( ⋅− ∑Wherewa = area of wetland (ha)wa = area of wetland (ha)wy = wetland yield, estimated (US$/ha)fd = deviation of flows from ‘normal’ flows,lw = deviation of lake storage from ‘normal’ storage (only forlw deviation of lake storage from normal storage (only for
Cambodia)dfw= damage coefficient for flows at wetland sitesdlw = damage coefficient for lake storage at wetland site (only
UCD/Embrapa
g g ( yfor Cambodia)
β = the adjustment factor (here: 1.1).
Wetland Net Benefit Function, Example Lao PDREconomics – Benefit Functions Relating Water to Off-stream or Instream use
UCD/Embrapa
National or National or regional policies on water
Institutions: Organizations and Policies
National or Regional agencies
National or regional policies on waterand economic development
Basin policies on multiplepurposes of water use water supply
Basin (sub-basin) authoritypurposes of water use, water supply, hydropower, environmentaland ecological requirements, water quality, flooding control,
it i d O&MAdministrative units(states or provinces,
ti iti )
capacity expansion and O&M
Inter-regional agreements on water allocation and water tradecounties or cities) water allocation and water trade
Inter-sector water allocation, water right and marketsIrrigation
districtsUrban areas water right and markets,
water prices and O&M cost,water use agreements,
UCD/Embrapa
Farms On-farm water management
T O ti i ti Si l ti
Model Description – Holistic ApproachType: Optimization + Simulation
Structure: Holistic, spatially distributed sources & demand
&Process: Deterministic & extended stochastic
Spatial Domain: Basin + Groundwater
Time Domain/Step: Multi-year planning horizon / month
Governing Eq’ns: Algebraic hydro/agro/econ/inst.
Objective Function: Maximize net water benefits: Irri./M&I/hydroState variables: River flows / reservoir storage / groundwater
table / soil moisture / soil salinitytable / soil moisture / soil salinity
Decision Variables: Crop acreage / water withdrawal & alloc./ reservoir release / groundwater pumping /
UCD/Embrapa
reservoir release / groundwater pumping / capacity expansion / economic incentives
Limitations
Cannot be used for day-to-day river system operationoperation
Can be linked to poverty if water users are disaggregated by income levels f exdisaggregated by income levels, f.ex.
Focus on productive water uses manipulated by h d l i f dhumans, and less on rainfed water management [where a lot of poverty persists], but the latter can be represented if it rainfed agriculturecan be represented if it rainfed agriculture results in changes in inflows
UCD/Embrapa
Modeling Water-Poverty Links:A Brief Overview of SFRB Methods
Steve Vosti&
SFRB Team
UCD/EmbrapaFebruary 2008
Estimating Impacts, Behavioral Changes, or BothChanges, or Both
• Ignore One or Both• Guess at One of Both• Guess at One of Both• Generate Empirical Estimates
– Very simply – e.g., general notions based on PRA exercisesy p y g , g– More complex – e.g., farm budgets, NR inventories, land use
systems analysisVery complex e g bioeconomic models that simulate– Very complex – e.g., bioeconomic models that simulate human behavior and biophysical processes
• Which Is the Proper Tool for You?p– What is the policy question (type of policy, target, time
frame)?How much time do you have?
UCD/Embrapa
– How much time do you have?– How much money do you have?
Key Objectives of Hydro-Economic Models
• Understand Farmer Behavior and Outcomes– Cropping patterns, input mix, water use– Income– Surface water and groundwater availability
• Predict the Effects of Proposed Policy and other Changes on Farmer Behavior/OutcomesChanges on Farmer Behavior/Outcomes
• Inform Policy• Modeling at Three Spatial ExtentsModeling at Three Spatial Extents
– Plot-Level LUS Model– Buriti Vermelho Model
UCD/Embrapa
– Basin-Wide Model
One Tool -- LUS Analysisy• Focus on Land Use Systems (LUS)
– Multi-year duration – Different intermediate and end uses
• Estimate Economic Performance– Discounted streams of input costs and product revenuesDiscounted streams of input costs and product revenues
• Technical coefficients and input/output prices– Calculate economic returns to key factors of production
• Land, labor,
• Estimate the Environmental Effects– E.g., carbon stocks
• Estimate the Sociocultural Effects• Estimate the Sociocultural Effects– E.g., food security, labor requirements
• Highlight Institutional Impediments to LUS Adoption
UCD/Embrapa
• Compare Across LUS – Trade-Offs/Synergies
Land Use System Analysis
• Spatial Resolution, Time Steps, and Temporal Extent– Single parcel of land, specific series of cropping activities,
specific production and water use technologies specific endspecific production and water use technologies, specific end date
– Annual time stepsMulti year duration– Multi-year duration
– Different intermediate and end usesField #1Field #1Year 1
Field #1Year 2 Field #1
Y 3Year 3 Field #1Year 4 Field #1
Year 10 Field #1
UCD/Embrapa
Year 15
Above-Ground Carbon vs. R t t L bReturns to Labor
140160
bon
ed)
wage rate
F t
Managed Forest
80100120140
roun
d ca
rbm
e av
erag Forest
Coffee/Bandarra
0204060
Abo
vegr
(t/h
a--t
im
Annual/Fallow
TraditionalPasture
Coffee/RubberCoffee/Bandarra
Improved FallowImprovedPasture
00 2 4 6 8 10 12 14 16 18 20 22
$R per person-day
UCD/Embrapa
Policy Experiments Using LUSPolicy Experiments Using LUS
UCD/Embrapa
Modeling the Buriti VermelhoSub-CatchmentSub Catchment
BrazilSan Francisco
River Basin
Brazil
UCD/Embrapa
A Spatially Distributed HydrologicA Spatially Distributed Hydrologic Model for Buriti Vermelho
UCD/Embrapa
A F L l E i M d l f BVA Farm-Level Economic Model for BV
• Objective:Objective:– Maximize farm profits
• Subject to:Subject to:– Agronomic constraints
• e.g., yields on given soilsg , y g– Household resource constraints
• Cash and family labor– Availability and costs of surface water and
groundwaterI t d d t i
UCD/Embrapa
– Input and product prices
BV M d l ’ T l d S ti lBV Models’ Temporal and Spatial Resolutions and Extents
Temporal ResolutionHydro model minutes
Spatial ResolutionHydro model 30m x 30m x
Econ model agricultural seasonsdepth-of-water-table gridsEcon model farm boundaries x depth-of-tube-
Spatial Extent
well
Temporal ExtentSpatial ExtentBuriti Vermelho sub-catchment area, both models
Temporal ExtentA decade, both models
UCD/Embrapa
Objective Functionj),,())(,(max zxpxx
ssiss irrirrsi si si
ewsijsjirrsinirrsisi cxwewqp∑ ∑ ∑−−
A i lt l P d ti F ti Effective Water
, , ,si si si
Crop Prices
Agricultural Production Function•Vector of Non-Irrigation Inputs (xnirr):
•Fertilizers, seeds, land, pesticides, machinery etc
Non-Irrigation Input Cost
ect e ateCost
• Irrigation Input Prices – pirr
• Irrigation Inputp , y•Effective Water – ew
•Function of Irrigation Inputs (xirr):•Applied water
Groundwater
• Price - wsj• Quantity - xsij
Irrigation InputQuantities - xirr
• z – Vector of Factors that
may affect•Groundwater•Surface water
•Irrigation Capital •Irrigation Labor
may affect groundwater extraction costs(e.g. water table
depth)
UCD/Embrapa
g•Irrigation Energy
depth)
Constraints
si lsLand: land B ,⎧ ≤⎪
∑
s
si lsi
si swi
,
Surface Water: sw B ,⎪⎪ ≤⎪⎪⎨
∑
∑ResourceConstraints
si fli
Family labor: B ,
Credit: c B
sfl⎨
≤⎪⎪⎪ ≤
∑
∑
Constraints
ssi ci
Credit: c B ,⎪ ≤⎪⎩
∑
∑ ∑Applied Water ∑ ∑≤+si si
sisisi awgwsw, ,
Applied WaterConstraint
Surface Applied
UCD/Embrapa
Surface Water Groundwater
ppWater
Hydrologic & Economic Model Linksy g
HYDROLOGIC• Crop-specific Algorithm to translate MODEL• poduction
• water use• irrigation efficiency
gcropping decisions into
water demand
Cropping Decisions Hydrologic Consequences
ECONOMICMODEL
• Water available for ag• surface water
Algorithm to translatehydrologic
consequences
UCD/Embrapa
O • surface water• groundwater
consequencesinto farm-level water
availability
Econ Data Requirements For BV ModelFor BV Model
• Input Quantity and Price per season, per crop, per farm: • Output Quantities and Prices farm:– land– fertilizers
p Q– per crop– per season
per farm– pesticides – seeds – labor and family labor
– per farm
• Costs of groundwater pumpingy
– machinery – irrigation inputs:
• applied water from
– Fixed costs of groundwater wells
– Depth from surface to water • applied water from surface and groundwater sources
• irrigation labor
ptable
C dit C t i t
UCD/Embrapa
• irrigation labor • irrigation capital• energy (kwh/ha)
• Credit Constraints
Structure of Basin-Wide Rainfall-R noff H drolog ModelRunoff Hydrology Model
UCD/Embrapa
Spatial Disaggregation of SFRB
UCD/Embrapa
B i Wid M d l ’ T l dBasin-Wide Models’ Temporal and Spatial Resolutions and ExtentsSpatial Resolution
Hydro model 14 large polygons
Temporal ResolutionHydro model month
Econ model Município
Hydro model monthEcon model agricultural season
Spatial ExtentSpatial ExtentSFRB, both models
Temporal Extent
UCD/Embrapa
Decades, both models
Econ Data Requirements For Basin Wide ModelBasin-Wide Model
• Input Quantity and Price per season per crop per • Output Quantities and Prices per season, per crop, per município:– land
f tili
p Q– per crop– per season
per município– fertilizers – pesticides – seeds
– per município
• Credit Constraints
– labor and family labor – machinery – irrigation inputs:irrigation inputs:
• applied water• irrigation labor
i i ti it l
UCD/Embrapa
• irrigation capital• energy (kwh/ha)
Hydrologic & Economic Model Linksy g
HYDROLOGIC• Crop-specific Algorithm to translate MODEL• poduction
• water use• irrigation efficiency
gcropping decisions into
water demand
Cropping Decisions Hydrologic Consequences
ECONOMICMODEL
• Water available for ag• surface water
Algorithm to translatehydrologic
consequences
UCD/Embrapa
O • surface water• groundwater
consequencesinto farm-level water
availability
Resolution vs Extent of Economic and Hydrology Modelingand Hydrology Modeling
Resolution (space and time t ) Extent (total space and time)
Dec
ades
step) Extent (total space and time)
Dec
ades
Extent
De
D
Tim
e
coupling
econ
ds hydrologicresolution
economicresolution
econ
ds
UCD/Embrapa
Millimeters Kilometers
Se
Space Millimeters Kilometers
Se
Space
Muito Obrigado!
UCD/Embrapa
Muito Obrigado!
UCD/Embrapa
Top Related