Optimal Watershed Management for Reservoir Sustainability: Economic Appraisal

Abstract

Accumulation of sediment from upstream agricultural land may shorten the lifetime of a reservoir and reduce its long-term benefits. This paper presents a framework for assessment of management strategies that simultaneously considers upstream soil conservation and downstream reservoir-level sediment control. A dynamic model that utilizes optimal control theory is developed for this purpose. Simulation results from the model are expected to provide practical information for policy makers, such as determination of the best sediment removal technology, the optimal timing to install this technology, and the optimal pattern of soil conservation efforts. An illustrative application to Lake Aswan, which is located between the Sudan and Egypt, indicates that the highest permissible level of soil conservation and the unconstrained dredging installed at 22 years are the best management practices, giving a sustainable life of the reservoir and net benefits of $117.8 billion. The cooperative strategy compared to the noncooperative and baseline strategies increases social net benefits by $6.5 billion and $7.8 billion, respectively. To test the robustness of this study’s results, sensitive analysis for key parameters, such as interest rate, water price, agricultural sediment contribution, and soil conservation effectiveness was performed. The results are very sensitive to selected parameters. As suspected, interest rate and water price shift the net present value of watershed on both sides. However, the rank of alternatives does not change.