Least-Cost Provision of Ecosystem Services from Water: When, Where, and How Much?

Abstract

Changes in surface or groundwater management influence water use patterns as well as the economic value and sustainability of all water uses. In water-scarce regions, programs that establish environmental flows usually involve reallocating water from another productive use. Few peer-reviewed papers to date have investigated impacts on system-wide economic performance resulting from environmental flow regimes. This work presents an original approach to address that gap by developing and applying a basin-scale hydroeconomic optimization model of North America’s Middle Rio Grande Basin to explore impacts of environmental pulse flows on the region’s economy and water stocks. The model accounts for surface and groundwater storage, irrigation, urban, recreational, and environmental demands; surface water inflows under various climate scenarios; groundwater pumping and recharge; substitute water prices; crop water use; evaporation; as well as institutional constraints governing water use. Results show that climate change, in the form of highly variable inflows, has an impact on the total and marginal cost of implementing environmental pulse flows, amplified by the conjunctive nature of the system.