W4100 Water Management and Development Spring 2007

1. W4100 Water Management and Development Spring 2007 Instructors Upmanu Lall, Assis Souza, Casey Brown and Tobias Siegfried

2. The Challenges • How can technology and policy innovations meet the challenge of providing water for the growing populations in the 21st century? • Water for multiple competing uses: food, domestic, energy, ecology … • Technology options and their analysis • Sources, and their development. Facility Design & Operation • Novel and Emerging technologies • Institution design: pricing, incentives, allocation and regulation of water use and allocation, water contracts and financial risk management • Private and Public Sector investment and Operation • How can the impacts of climate variability and change be addressed? • Flood and Drought Risk Mitigation – Structural and non-structural aspects • Climate and Water supply/demand forecasts and system operation • Scenario Generation and Uncertainty Quantification • Decision Making under Uncertainty • Multiple Objectives • Various types and sources of uncertainty • Role of Time Horizon • Stochastic Models and Analysis using Causal Networks and Game Theory

3. Water in the 21st Century • A story of Change and Insecurity?

4. Semi-Arid and Arid Sub-Tropics and Tropics & Areas w/ High Population Density In the 20th century the world population tripled –while water use multiplied six-fold! By 2025 two thirds of the people in the world are expected to live in areas of water shortage or stress.

5. Life?

6. Vorosmarty et al 2000

7. Vorosmarty et al 2000 Climate change the bogeyman or is it just people? We are increasingly mining and evaporating water and changing land cover  potentially major feedbacks to climate through changes in water vapor – a greenhouse gas. What this component of human forcing will do is still unclear.

8. 1960 104 wells 2005 2*107 wells Waterlogging, salinization and deep groundwater decline

9. Water Table Decline >400 ft Rivers have undergone significant degradation in flow and quality as well Width of Ganges at the confluence with Yamuna is now typically 3 to 4 km smaller With all these benefits, it is not surprising that farmers and entrepreneurs have invested around US$12 billion in groundwater pump structures. This sum is huge, especially when compared with the US$20 billion of public money spent on surface-water irrigation schemes over the last 50 years

10. Message • An imminent freshwater crisis • Demand > Supply  water sets local and global carrying capacity? • Access to safe drinking water: poor, but also rich • High variability in supply Major investments needed for growth • Potential for trans-boundary conflict • Climate Change: Cause or Effect? Water is the major uncertainty • The path to today: water security • River Basin and Aquifer Development: People then life • Centralized Water & Wastewater Treatment • Water Rights, Economic Allocation, Conservation, Efficiency • The path to the future: sustainability and resilience • Agriculture in the Ocean/Brackish Waters: Genomics? • Renewable means renewable: Water mining vs Recycling? • Water for Life; Recycling for People • Solar + Wind Energy = Desalination/ Water Treatment • Integrated Water, Agriculture & Energy Systems: Multiply Productivity • Major Investments in New technology Implementation • Developing Countries as the opportunity for innovation

11. Background • Water System Management Goals: • Allocation: Efficiency (Physical and Economic), Equity • Operation: Reliability (1-Risk), Resilience • Design: Highest Expected Benefit-Cost Ratio • Risk Reduction for Floods and Droughts • Tradition: Command & Control Management (Play God) • New Trend?: Open, Participatory, Informed, Negotiated, Regulated Process – Opportunity? • >30 year history of formal procedures for Decision Making Under Uncertainty for Public Water Projects • Flood Control Design, Reservoir Design • Reservoir Rule Curves for Operation • Building block: Estimated Probability Distribution of select hydroclimatic state variables • Challenge: How to do this in a changing climate? (but everything else – demands, economics, institutions also changes)

12. 19th century : Personal Levees, Rebuild to higher than last biggest 20th century : Dams, Levees, bypass, Heavily Federally Subsidized 21st century : ??

14. Can we develop an adaptive risk management process to address changing conditions? • Move from Static to Dynamic Risk Management • Changing Climate • Changing goals • Changing population demographics and landscape • “Hard” and “Soft” Technologies • Design & Operation of Structures • Allocation Rules and Water Rights • Risk Sharing and Reduction Strategies • Develop ideas through examples at multiple scales

15. Personal & Aggregate Impacts of Drought Drought Water Supply Rain Fed Agriculture Irrigation Municipal & Industrial Crops Labor • Forecast Usefor: • Budget Management • Drought Insurance • Local Planning • Guidance of Crop Selection, Seed Release, & Area planted Permanent Seasonal Human Use Industry Crops Forecast Driven, Participatory, Water Allocation System with Reliable Contracts, Trading and Insurance Mechanisms Season to Year Ahead Forecasts of Climate & User Variables L i n k i n g S c i e n c e t o S o c i e t y

16. Existing Process L i n k i n g S c i e n c e t o S o c i e t y • Reservoir water is allocated to: • Municipalities • Irrigation Districts • Some large users (irrigation or industry) • Permissions or Contracts are given for • 10 years, 1 year or 6 months • Payment structure • Industry and Municipality Pay based on use (R$ 1/m3) • Some Medium to Large Irrigation Users Pay (R$ 0.04/m3) Relatively simple system – no hydro or flood control Water committees and a water agency make decisions (nominally) Initial Aggregation Level for our analysis: Approx. 6 Reservoirs, 6 irrigation (including private operators) districts, Fortaleza, 5 Municipal aggregates, 2 Industry districts

17. Water Contracts Specification • Duration, T (e.g., 1year) • total volume of water, Ri (e.g., 10,000 m3) to be delivered over duration, T • Within period distribution, ti (e.g., equal for each month), • Amount, i (e.g., R$50,000) to be paid for the water if contract terms are met • Target reliability, (1-pfi) (e.g., 90%) • In the event inflows are less than forecast • Restrictions, wi*, are applied that the supplier can impose as part of the contract • Restriction fraction, ij, signifying the reduced supply under restriction level ‘j’ (where j = 1, …, nr with nr is the total number of restriction levels agreed by the water committee) • Compensations under restrictions (ij) and contract failure (i)

18. Multivariate, Semiparametric Regression Oros Jan-Dec Flow Forecast from previous July – model fit using only 1914-1991 Correlation (Median & Obs)=0.91 L i n k i n g S c i e n c e t o S o c i e t y

19. Jan-Dec Water System Operation --- Monthly Forecast Updates Revise Forecast COGERH Water Agency Assess Failure Potential Annual Allocations for each User FUNCEME/IRI Reservoir Optimization Surplus Declaration Contract Failure Notification State or Private Insurer Water Users Irrigation, Permanent Compensate if contract fails Water Users Industry, Canning Water Committee Trading of Contracts between users L i n k i n g S c i e n c e t o S o c i e t y L i n k i n g S c i e n c e t o S o c i e t y

20. Class Structure: • General Orientation – what is the water problem/intro case studies • Global Issues, Regional Issues, Local Issues • Past Efforts – Physical and Institutional • Supply & Demand: Water Sources and Options, Water Users including Environment • Role of Climate • Population Dynamics and Water • Develop case studies into a decision problems • Intro Institutional and Physical Factors • Simplified problems to introduce • Role of probability, simulation and optimization • Decision tree principles and application • Rain Water Harvesting system design for the smallest spatial scale – but cover all time scales • Increase spatial scale to village from house-farm and discuss system components and demand estimation, competition, transaction • Adding distribution system, wells, + common storage • Cooperation, demand management, resilience, water rights • Increase spatial scale to district/river basin from village and discuss system components and demand estimation, competition, transaction • adding reservoir systems, hydropower, flooding and water quality • Adding planning, investment, regulation, markets, allocation, competition and its analysis • Insights from Game Theory and Agent Based Models • Value of Information – uncertainty reduction • Financial Risk Management /Insurance • Term Project Topic Selection and Group Work • Support for Decision Tree Formulation • Support for Modeling

21. Approach: Design and Operation of Systems with Risk Management and Resilience 1. Decision-Theoretic Modeling Problem Identification and Structuring Option Identification and Evaluation Screening Tools Objectives and Constraint Definition Treatment of Uncertainty and Framing Issues Sources of Uncertainty and Risk Analysis Decision Tree Evaluation and Sensitivity Analysis Simulation Systems modeling and scenario generation Stochastic methods for risk analysis Climate Information and non-stationarity Potential for forecasting Optimization Methods and Trade-off Analysis

22. 2. Institutional Factors Water Rights Priority and Seniority based Contract based Regulation and Pricing Participatory Processes Project Evaluation Guidelines and Benefit-Cost Analysis Financing and Cost Allocation Primary and Secondary Benefits Sectoral and Trans-basin competition and cooperation Game Theory Incentive Based Approaches Water Banks Markets/Trading Pricing as an Incentive for conservation Risk Management Insurance Loss based Insurance Index Insurance Contract Insurance

23. 3. Physical Systems Climate Variability and Change Supply and Flood impacts Demand Impacts Groundwater/Well Hydraulics Excel /Interactive GW Model Flood Frequency Analysis and Flood Control Design Rainfall-Runoff Modeling Flood Hydraulics – HECRAS Reservoir System Simulation – Excel Markov Simulation Rain Water Harvesting System Analysis – Excel Water Distribution System Hydraulics - EPANET Canal and Pipe Network Performance Water Quality Simulation – Qual2E Crop Model and Agricultural Water Demand Estimation Urban Water Demand Estimation Novel and Emerging Technologies Wastewater treatment and Reuse Desalination