Frank A. Ward

Water conservation in irrigation can increase water use

Climate change, water supply limits, and continued population growth have intensified the search for measures to conserve water in irrigated agriculture, the worlds largest water user. Policy measures that encourage adoption of water-conserving irrigation technologies are widely believed to make more water available for cities and the environment. However, little integrated analysis has been conducted to test this hypothesis. This article presents results of an integrated basin-scale analysis linking biophysical, hydrologic, agronomic, economic, policy, and institutional dimensions of the Upper Rio Grande Basin of North America. It analyzes a series of water conservation policies for their effect on water used in irrigation and on water conserved. In contrast to widely-held beliefs, our results show that water conservation subsidies are unlikely to reduce water use under conditions that occur in many river basins. Adoption of more efficient irrigation technologies reduces valuable return flows and limits aquifer recharge. Policies aimed at reducing water applications can actually increase water depletions. Achieving real water savings requires designing institutional, technical, and accounting measures that accurately track and economically reward reduced water depletions. Conservation programs that target reduced water diversions or applications provide no guarantee of saving water.

The economic value of water in agriculture: concepts and policy applications☆

The design of institutions that maximizes waters beneficial use in the face of growing demands for scarce and random supplies is the central policy issue in dry places. Information on waters economic value enables decision makers to make informed choices on water development, conservation, allocation, and use when growing demands for all uses are made in the face of increased scarcity. Conceptually correct and empirically accurate estimates of the economic value of water are essential for rational allocation of scarce water across locations, uses, users, and time periods. This review article raises several issues that must be considered in deriving accurate estimates of the economic value of water. These include establishing common denominators for water values in quantity, time, location and quality; identifying the point of view from which values are measured; distinguishing the period of adjustment over which values are estimated; and accounting for the difference between total, average, and incremental values of water. We illustrate values of water for agricultural use, based on a recent drought policy analysis of the Rio Grande Basin.

Valuing Nature with Travel Cost Models

The book presents a self-contained treatment of TCM along with a wide range of applications to natural resource and environmental policy questions.

Testing Transferability of Recreation Demand Models Across Regions: A Study of Corps of Engineer Reservoirs

This research tests the interchangeability of two specifications of travel cost demand models for recreation at U.S. Army Corps of Engineer reservoirs in Arkansas, California, and Tennessee/Kentucky. Statistical tests of coefficient equality for both nonlinear least squares and Heckman sample selection models suggest rejecting a transferable model among all three regions. However, the nonlinear least squares models in Arkansas and Tennessee were similar enough to fail to reject the hypothesis of equal coefficients at the 0.01 significance level. Even so, interchanging the Arkansas and Tennessee nonlinear least squares coefficients produces visitor use and total benefit estimates that are more than 100% too high. However, interchanging coefficients does provide reasonably close estimates of the average consumer surplus per trip for both states using the nonlinear least squares model (±5% to 10%). This is due to similarity of the price coefficients in the two models. Thus a more limited form of transferability which focuses on average benefit per day, rather than on predicting total use and total benefits, appears promising.

Specification considerations for the price variable in travel cost demand models.

The travel cost method (TCM) which is used to impute a value to outdoor recreation resources has traditionally examined the statistical relationship between visit rates to a site and the observed variable travel cost per visit. Users of the TCM then typically use that statistical relationship to infer a demand relation between visit rates and a schedule of unobserved entry fees. In using data on these observed travel costs to infer a behavioral response to unobserved entry fees, the TCM will only generate an unbiased estimate of consumer surplus accruing to site visitors in certain circumstances. Specifically, assuming linearity, it is required that the estimated (linear) coefficient (Bk) explaining visits as a function of observed travel costs, r=f(R), is equal to the unobserved coefficient (Bp) which explains visits as a function of entry fees (price). Unfortunately, nothing guarantees that Bc is the same as Bp. Thus, in order to obtain an unbiased esti-

Economic impacts of federal policy responses to drought in the Rio Grande Basin

region’s scarce water supply. This paper presents an analysis of the impacts of severe and sustained drought and of minimum in-stream flow requirements to support endangered species in the Rio Grande watershed. These impacts are investigated by modeling the physical and institutional constraints within the Rio Grande Basin and by identifying the hydrologic and economic responses of all major water users. Water supplies, which include all major tributaries, interbasin transfers, and hydrologically connected groundwater, are represented in a yearly time step. A nonlinear programming model is developed to maximize economic benefits subject to hydrologic and institutional constraints. Results indicate that drought produces considerable impacts on both agriculture and municipal and industrial (MI) uses in the Rio Grande watershed. In-stream flow requirements to support endangered species’ habitat produce the largest impacts on agricultural water users in New Mexico and Texas. Hydrologic and economic impacts are more pronounced when in-stream flow requirements dictate larger quantities of water for endangered species’ habitat. Higher in-stream flow requirements for endangered species in central New Mexico cause considerable losses to New Mexico agriculture above Elephant Butte Reservoir and to MI users in Albuquerque, New Mexico. Those same in-stream flow requirements reduce drought damages to New Mexico agriculture below Elephant Butte Reservoir and reduce the severity of drought damages to MI users in El Paso, Texas. Results provide a framework for formulating federal policy responses to drought in the Rio Grande Basin.

Financing Irrigation Water Management and Infrastructure: A Review

Many of the worlds irrigated regions face the problem of aging infrastructure and declining revenues to maintain and repair irrigation structures. Policy debates over climate change, population growth, food security, and impacts of irrigation on ecological assets compound the problem, raising the urgency to invest in irrigation infrastructure. Meanwhile, a global call for full-cost recovery for water infrastructure investments increases the need to identify the economic value of sustaining irrigation infrastructure. Despite the growing debates, little comprehensive research has been conducted summarizing factors affecting irrigation investments or policy options available for sustaining irrigation infrastructure. This paper reviews research on factors affecting the level and value of irrigation infrastructure investments. It also reviews research on policy instruments for sustaining irrigation infrastructure, considering both market and institutional approaches. Several market approaches have been found to have the potential to influence the economic attractiveness of investments in irrigation infrastructure. These include infrastructure subsidies, clearing titles to water rights, marginal cost pricing, and non-volumetric pricing. Institutional approaches described include regulatory measures, transboundary agreements, and water user associations. Results may contribute to current debates in various regional, national, and international forums on whether and how water should be priced for agricultural use.

The Economic Value of Water in Recreation: Evidence from the California Drought

A significant barrier to economically efficient management of most reservoir systems is lack of reliable information about how recreational values change with reservoir levels. This paper presents evidence on marginal values of water for recreation at Corps of Engineer reservoirs in the Sacramento, California, District. Data on visitors were collected by origin and destination before and during the early part of the 1985–1991 California drought. Because lake levels varied widely during the sample period, waters effect on visits was isolated from price and other effects. An estimated regional travel cost model containing water level as a visit predictor provided information to compute marginal values of water in recreation. For the range of the lake levels seen, annual recreational values per acre-foot (1234 m3) of water vary from

Is dominant use management compatible with basin‐wide economic efficiency?

6 at Pine Flat Reservoir to more than

Water, Food, and Energy Security: An Elusive Search for Balance in Central Asia

600 at Success Lake. These findings are limited to use values of visitors who travel to the reservoirs and do not reflect passive use values to people who value the reservoirs but never visit them. Analysts could apply similar methods to other river basins in which a public agency controls the management of multiple water uses.