To capture the interactions between hydrologic and economic systems necessary for modeling water quality at a sufficient level of spatial detail, we have designed a modular framework that couples an economic model with a watershed model. To represent the economic system, the Rectangular Choice-of-Technology (RCOT) model was used because it represents both the physical and monetary aspects of economic activities and, unlike traditional input-output or general equilibrium models, it can optimize choices among operational technologies in addition to the amount and location of production. For the first implementation of this modeling framework, RCOT is coupled with a watershed model, Hydrological Simulation Program-Fortran (HSPF), which was calibrated to represent Cedar Run Watershed in northern Virginia. This framework was used to analyze eight scenarios related to the expansion of agricultural activity in Fauquier County. The database for RCOT used county-level input-output data representative of the region in 2012. Thus, when crop farming was expanded to fully utilize the farmland available in the watershed, the nitrogen concentration at the outflow of the watershed increased from 0.6 to 4.3 mg/L. However, when RCOT could select between a standard and a more nitrogen-efficient management practice, the outflow nitrogen concentration only increased to 2.6 mg/L because RCOT selected the more resource-efficient practice. Building on this modular framework, future work will involve designing more realistic scenarios that can test policy options and regional planning decisions in a wide range of watersheds.
Economic models and watershed models provide useful results, but when seeking to integrate these systems, the temporal units typically utilized by these models must be reconciled. A hydrologic-economic modeling framework is built to couple the Hydrological Simulation Program-Fortran (HSPF), representing the watershed system, with the Rectangular Choice-of-Technology (RCOT) model, an extension of the basic input-output (I-O) model. This framework is implemented at different sub-annual timesteps to gain insight in selecting temporal units best suited for addressing questions of interest to both economists and hydrologists. Scenarios are designed to examine seasonal increases in nitrogen concentration that occur because of agricultural intensification in Cedar Run Watershed, located in Fauquier County, northern Virginia. These scenarios also evaluate the selection among surface water, groundwater, or a mix of (conjunctive use) practices for irrigation within the crop farming sector in response to these seasonal impacts. When agricultural intensification occurs in Cedar Run Watershed, implementing conjunctive use in irrigation reduces the seasonal increases in nitrogen concentration to specified limits. The most efficient of the conjunctive use strategies explicitly considered varies depending on which timestep is utilized in the scenario: a bi-annual timestep (wet and dry season) vs. a seasonal timestep. This modeling framework captures the interactions between watershed and economic systems at a temporal resolution that expands the range of questions one can address beyond those that can be analyzed using the individual models linked in this framework.
This paper illustrates the intimate coupling of a hydrologic model with an economic input–output model. A realistic watershed and a simple hypothetical economy are used to illustrate the trade-off between water use and water availability. This approach provides two key benefits for water management. First, it directly links the supply side (the hydrologic model is used to estimate water availability) to the demand side (the economic model is used to estimate water use by sector) using a common framework that accounts for the interdependence of the two models. This link allows us to analyze water allocation and calculate the intensity of water scarcity. Second, it enables us to consider the effect of spatial distribution of economic activity on the hydrologic model and prevents either under or over estimating water scarcity. Without this spatial disaggregation, a shortfall in one sub-watershed may be offset by an abundance in another sub-watershed. The framework is sufficiently flexible to assess more complex situations, including varied spatial disaggregation and feedbacks. The coupled model is much faster and can be applied to watersheds with different characteristics. We use system dynamics to develop the integrated hydrologic-economic modelling framework and analyze three scenarios: a baseline situation, a spatially-resolved coupled model, and a temporally-resolved coupled model. The paper concludes with recommendations for implementation and future research.
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