This paper presents results of a large-scale economic-engineering optimization model of California's water supply system. The results of this 4-year effort illustrate the value of optimization modeling for providing integrated information needed to manage a complex multipurpose water system. This information includes economic benefits of flexible operations, economic valuation of capacity expansion opportunities, estimating user willingness to pay for additional water, economic opportunity costs of environmental flows, and identification of promising conjunctive use and water transfer opportunities. The limitations of such modeling also are discussed. Overall, the results suggest improvements to system operation and water allocations with a statewide expected value potentially as high as $1.3 billion/year. Significant improvements in performance appear possible through water transfers and exchanges, conjunctive use, and various operational changes to increase flexibility. These changes also greatly reduce costs to agricultural and urban users of accommodating environmental requirements. Model results also suggest benefits for expanding selected conveyance and storage facilities.
[1] This paper examines levee-protected floodplains and economic aspects of adaptation to increasing long-term flood risk due to urbanization and climate change. The lower American River floodplain in the Sacramento, California, metropolitan area is used as an illustration to explore the course of optimal floodplain protection decisions over long periods. A dynamic programming model is developed and suggests economically desirable adaptations for floodplain levee systems given simultaneous changes in flood climate and urban land values. Economic engineering optimization analyses of several climate change and urbanization scenarios are made. Sensitivity analyses consider assumptions about future values of floodplain land and damageable property along with the discount rate. Methodological insights and policy lessons are drawn from modeling results, reflecting the joint effects and relationships that climate, economic costs, and regional economic growth can have on floodplain levee planning decisions.
1] Farmers make joint water and land use decisions for economic purposes based in part on water availability and reliability. A two-stage economic production model is developed to examine the effects of hydrologic uncertainty and water prices on agricultural production, cropping patterns, and water and irrigation technology use. The model maximizes net expected farm profit from permanent and annual crop production with probabilistic water availability and a variety of irrigation technologies. Results demonstrate effects of water availability, price, and reliability on economic performance, annual and long-run cropping patterns, and irrigation technology decisions. Variations in water price and availability affect the desirability of different irrigation technologies. Increased water supply reliability can raise the probability of higher economic returns and promote more effective use of water for permanent crops. Such economic benefits can be compared to costs of operational changes and programs to increase water supply reliability for agricultural areas.Citation: Marques, G. F., J. R. Lund, and R. E. Howitt (2005), Modeling irrigated agricultural production and water use decisions under water supply uncertainty, Water Resour. Res., 41, W08423,
This paper applies two-stage stochastic quadratic programming to optimize conjunctive use operations of groundwater pumping and artificial recharge with farmer's expected revenue and cropping decisions. The two-stage programming approach allows modeling of water and permanent crop production decisions, with recourse for uncertain conditions of hydrology, annual crops, and irrigation technology decisions. Results indicate potential gains in expected net benefits and reduction in income variability from conjunctive use, with increase in high value permanent crops along with more efficient irrigation technology.
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