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Economics of Water Supply, Demand, and Conservation in the Paso del Norte Region Frank A. Ward

Sustainability on the Border: Water, Climate, and Social Change in a Fragile Landscape The University of Texas at El Paso. Economics of Water Supply, Demand, and Conservation in the Paso del Norte Region Frank A. Ward NM State University May 18, 2011 12:30 – 12:50 pm. Road Map.

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Economics of Water Supply, Demand, and Conservation in the Paso del Norte Region Frank A. Ward

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  1. Sustainability on the Border: Water, Climate, and Social Change in a Fragile LandscapeThe University of Texas at El Paso Economics of Water Supply, Demand, and Conservation in the Paso del Norte Region Frank A. Ward NM State University May 18, 2011 12:30 – 12:50 pm

  2. Road Map • Pose questions • What is water conservation in agriculture? • What policies could promote it? • Can river basin policy models help discover these policies? • Findings about effects of water conservation incentives in the Paso Del Norte Region

  3. Rio Grande Basin

  4. Journey down the Rio Grande

  5. High Valued Uses of Water in RGB, Albuquerque, El Paso

  6. High Valued Use: Rio Grande Silvery Minnow

  7. High Uses of Water in RGB, Irrigation

  8. Approach

  9. Policy Debates Basin Models Can Inform • Water Pricing and Cost Recovery • Timing, sizing, sequencing of new storage • Population growth, increased food demands, ‘more crop per drop.’ • Water rights adjudication • Meeting growing demands for environment • How to develop/allocate water for food security • Cheapest way to reduce water use (conservation)

  10. Basin Model (Optimization) • Maximize • Objective • Economic • Environmental • Social Justice • Hydrologic • Subject to • Constraints • Hydrologic • Agronomic • Institutional • Economic

  11. Policy Assessment Framework Data Policy Outcomes Process Headwater supplies Min Flows Sharing rules Outflows Crop prices Crop costs Water price Treat cost Elasticities Land supply Maximize NPV for the basin Crop prodn Crop ET Urban water diversions, use, Return flows, Flows by gauge Urban, farm, environmental benefits NPV Baseline: no new policy Alt 1: Constrain aquifers to return to start Alt 2: Renew aquifers to historical levels

  12. Connections • Connections: River basin models • Hydrologic: stocks, flows, over time, space • Economic: optimizes total benefits from use • Agronomic: acreage, water use, crops • Demographic: urban income, population, demand • Institutional: rules that limit use or require delivery • Gain insights into policies that best adapt to climate: resilient conservation institutions • For basin as a whole (or part, e.g. Paso del Norte Region ) • For targeted users (farm, city, environment)

  13. Water Balance

  14. NM Pecans: Water Balance Flood Drip 6’ 3.2’ 3.2’ 2.6’ 0 3.4’ 0

  15. A Peek at the Model

  16. Objective

  17. Constraints • Irrigable land, Headwater supplies • Sustain key ecological assets • Hydrologic balance • Reservoir starting levels (sw, gw) • Reservoir sustainability constraints (sw, gw) • Institutional • Endangered Species Act • Rio Grande Compact (CO-NM; NM-TX) • US Mexico Treaty of 1906 • Rio Grande Project water sharing history (NM/TX)

  18. Gauged Flows: Hydro Balance • E.g.: Lobatos gauge (CO-NM border): X(Lobatos_v,1) = X(RG_h,1) - X(SLV_d,1) + X(SLV_r,1)

  19. Ag water use

  20. Results of Ag Water Conservation Policy Analysis • Ag Water Use and Savings • Water Supply (normal, dry, drought) • Ag water Conservation Subsidies (low to high)

  21. Lessons Learned: Ag Water Conservation • Farmers seek income, not conservation. Conservation must be profitable for irrigators to do it. • Subsidizing water conserving irrigation technology will reduce water applied per unit land for a given crop • Reduced water applied doesn’t always reduce water depleted by crops, esp if yields increase • Requiring sustainable reservoirs and aquifers in NM can reduce the use of drip irrigation.

  22. Policies that promote sustainable water use in Paso Del Norte Area • Complete water rights adjudications: provides clear definition of water rights • Surface water. Esp important in droughts • Groundwater. Limits unsustainable pumping • Remove restrictions on water trading • Trading and water pricing • Two tiered urban pricing: promotes conservation • Publicize water prices • Publicize water right prices • All signal cost of using water for low valued uses • Guard against weak conservation programs

  23. Lessons Learned: Research Challenges • Water conservation is hard to define, measure, forecast, evaluate, alter. • Counterfactual: How much less water would have been (will be) used if X irrigation technology would have been (is) subsidized.

  24. Top 10 Lies told by Watershed Policy Modelers 1. The model is well-documented with all limits • The model is user-friendly • The model fits the data • Results make sense • The model does that • We did a sensitivity analysis • Anyone can run this model • This model links to other models • The model will be in the public domain • The new version fixes all previous problems

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