Evaluating a Water Conservation Response to Climate Change in the Lower Boise River Basin

Transcription

1 Evaluating a Water Conservation Response to Climate Change in the Lower Boise River Basin Robert Schmidt and Garth Taylor University of Idaho Water Resources Research Institute and Dept of Agricultural Economics

2 Lower Boise River Basin in southwestern Idaho

3 Bureau of Reclamation Boise Project in the Lower Boise River Basin Payette River Payette Arrowrock Arrowrock 5 Boise River Anderson Ranch Arrowrock 4 Arrowrock 1 Arrowrock 2 Lake Lowell Arrowrock 3 Lucky Peak Snake River 1,058,000 af of storage 176,000 irrigated acres

4 A Recent Lower Boise River Basin Water Budget (USBR, 2008) 898,000 AF Boise Project average annual diversion 41% of diversions consumptively used by Project canal irrigators. 27% of diversions seep from Project canals and laterals into shallow aquifer. 52% of diversions return to drains. (surface and subsurface)

5 Boise Project Groundwater Response Zone and groundwater points of diversion Snake River Boise River Payette River Lake Lowell reservoir Rise in groundwater Level feet Boise Basin hydrologic model (IWRRI, 2012)

6 Boise Project Drain Return Response Zone and drain water points of diversion Increase in drain return acre-feet/year Payette River Boise River Lake Lowell reservoir Snake River Boise Basin hydrologic model (IWRRI, 2012)

7 Un-priced Boise Project canal seepage is a positive externality for non-project groundwater and drain water irrigators

8 A Modular Approach to Hydro-Economic Modeling Water Supply Models Water Demand Models Supply-cost functions Partial Equilibrium Optimization Model Demand-price functions Equilibrium water prices and quantities Net benefits

9 Irrigator Supply-Cost Functions Supply-cost functions are developed for canal, groundwater and drain water irrigators Supply-cost functions include a canal seepage hydrologic response term that shifts supply-costs of groundwater and drain water irrigators Illustrations

10 Supply cost per AF An aquifer response function shifts groundwater supply (pumping) costs downward $60 $55 no Boise Project canal seepage $50 $45 $40 current Boise Project canal seepage 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 65,000 Quantity supplied, AF

11 Supply cost per AF A drain return response function shifts the drain water supply constraint outward without Boise Project canal seepage with Boise Project canal seepage $ ,000 50,000 75, , , , , ,000 Quantity supplied, AF

12 Supply cost per AF A canal seepage conveyance cost function shifts the effective supply cost of Project canal water upward $10.00 $9.00 $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $ , , , ,000 1,000,000 Quantity supplied, AF 898,000

13 Demand price per AF Demand price per AF Irrigator Demand-Price Functions High value (cash) crops Fruit trees Seed Onions Potatoes Herbs $2,500 $2,000 $1,500 $1,000 $500 At $250/af Fruit trees, seed $0 0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 Quantity demanded, AF -1.2 to -1.4 At $50/af Herbs, Onions, Potatoes Low value (field) crops Alfalfa Corn Dry Beans Silage Hay $300 $250 $200 $150 $100 $50 At $30/af: corn, beans -2.5 to -3.2 At $5/af: alfalfa, silage, hay $0 0 15,000 30,000 45,000 60,000 75,000 Quantity demanded, AF Irrigation Water Demand from ET Production Functions (Contor, 2010)

14 Modifications made to the Constrained Optimization Model of Takayama and Judge (1971) Three new exogenous functions are introduced: Aquifer response function Drain response function Canal conveyance cost function Two new endogenous variables are introduced: The quantity of seepage externality accruing to groundwater irrigators. The quantity of seepage externality accruing to drain water irrigators.

15 Partial Equilibrium Conditions with Externalities p and q p -ρ ) 0 for q i 0 1. ρ 0 i i 2. p 0 3. i i i( i i Demand price = Equilibrium demand price i i i i ρ and q ( ρ p ) 0 for q 0 Supply price = Equilibrium supply price j x ji k 0 PE conditions do not correspond to KKT, no (benefit) objective function to maximize. PE conditions are solved for equilibrium quantities and prices using MCP (GAMS, PATH). j EX kji q i and ( x ji EX kji -qi) ρ for ρ i 0 i 0 j k j No excess demand. Quantity transported + Quantity of externality produced = Total quantity demanded. i 4. q xij EX ijk 0 ρ i i ( q xij - EX ijk) 0 i and for ρ 0 j j k j Excess supply. Quantity transported + Quantity of externality produced = Quantity supplied + Excess supply i ijk ij i ijk ij 5. ρ ρ t c 0 and x ( ρ ρ t c ) 0 for x ij 0 j 6. F x ) EX 0 ij ijk( ij ijk k ijk F x Quantity of externality produced = Quantity of externality transported (x ij ) ij Price linkage equation. Equilibrium demand price - Equilibrium supply price = Externality conveyance cost j j ij k k ijk F x (x ij )

16 price price Net-benefits are obtained using equilibrium prices and quantities as limits of integration with non-binding constraint with binding constraint Consumer surplus Pareto equilibrium Consumer surplus constraint cost quantity quantity

17 Impact of Climate Change on Lower Boise Basin Water Supply (WCRP and USBR, 2012) Altered timing of snow melt and natural flow Increased uncertainty in runoff forecasting Reduced supplies for Boise Project irrigation World Climate Research Program, 2012

18 Six Projections of Boise Project Water Shortages (USBR, 2012) WCRP Climate models 30 year average diversion (AF) Supply Shortage (AF) Percent shortage base-case 898, ccsm 898, , % 2 cgcm 898,000 44,132 5 % 3 echam 898,000 90, % 4 echo 898, , % 5 hadcm 898,000 95, % 6 pcm 898, , %

19 Net-Benefit Results of Three PE Model Scenarios Base case scenario: Boise Project 30 year average water availability Shortage scenario: Boise Project water supply constrained by projected shortages. Shortage + Conservation scenario: Boise Project water supply constrained by shortages with new canal lining conservation measures.

20 Boise Project net benefits (consumer surpluses) with climate change and canal lining conservation. (in millions $) Base-case scenario Boise Project shortage scenarios WCRP Net benefit Climate Net benefit percent model difference WCRP Climate model Boise Project shortage with canal lining scenarios Net benefit $90.45 ccsm $ % ccsm $ % $90.45 cgcm $ % cgcm $ % $90.45 echam $ % echam $ % $90.45 echo $ % echo $ % $90.45 hadcm $ % hadcm $ % percent difference $90.45 pcm $ % pcm $ %

21 Groundwater response zone net benefits (consumer surpluses) with climate change and canal lining conservation. (in millions $) Base-case scenario Boise Project shortage scenarios WCRP Net benefit Climate Net benefit percent model difference WCRP Climate model Boise Project shortage with canal lining scenarios Net benefit percent difference $10.00 ccsm $ % ccsm $ % $10.00 cgcm $ % cgcm $ % $10.00 echam $ % echam $ % $10.00 echo $ % echo $ % $10.00 hadcm $ % hadcm $ % $10.00 pcm $ % pcm $ %

22 Drain return response zone net benefits (consumer surpluses) with climate change and canal lining conservation. (in millions $) Base-case scenario Boise Project shortage scenarios WCRP Net benefit Climate Net benefit percent model difference WCRP Climate model Boise Project shortage with canal lining scenarios Net benefit percent difference $22.20 ccsm $ % ccsm $ % $22.20 cgcm $ % cgcm $ % $22.20 echam $ % echam $ % $22.20 echo $ % echo $ % $22.20 hadcm $ % hadcm $ % $22.20 pcm $ % pcm $ %

23 Basin-wide net benefits (consumer surpluses) with climate change and canal lining conservation. (in millions $) Base-case scenario Boise Project shortage scenarios WCRP Net benefit Climate Net benefit percent model difference WCRP Climate model Boise Project shortage with canal lining scenarios Net benefit percent difference $ ccsm $ % ccsm $ % $ cgcm $ % cgcm $ % $ echam $ % echam $ % $ echo $ % echo $ % $ hadcm $ % hadcm $ % $ pcm $ % pcm $ %

24 Potential Benefit and Forgone Benefit of new Water Conservation Measures $10.0 $7.5 basin-wide benefit restored by canal lining (in millions $) $5.0 $2.5 $0.0 -$2.5 -$5.0 hadcm pcm ccsm echo echam 0 50, , , , ,000 -$7.5 -$10.0 -$12.5 -$15.0 cgcm -$17.5 Projected water shortage (AF)

25 Conclusions Hydrologic externalities resulting from conjunctive surface and groundwater irrigation are common in the West. Hydro-economic modeling is an important tool for managing externalities (there are alternatives to eliminating them). Ignoring externalities can lead to an incorrect assessment of basin-wide benefits and foregone benefits of water conservation projects. Revised 2009 principles and guidelines for Federal Water Resource Planning

26 End

27 Edits slide 7, slide 9, slide 15