A Coupled Hydrologic-Economic Modeling Framework for Scenario Analysis

Abstract

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.

Applying a coupled hydrologic-economic modeling framework: Evaluating conjunctive use strategies for alleviating seasonal watershed impacts caused by agricultural intensification

“…As a result, previous I-O studies have focused on inter-year temporal development rather than intra-year temporal scales (Avelino, 2017). However, RCOT has unique features that allow for management options for all economic sectors and minimize the use of resources based on environmental constraints imposed by the watershed, which grounds human decisions in a region's physical reality (Amaya et al, 2021). By coupling RCOT with HSPF, a continuous watershed model, the seasonal environmental impacts caused by economic activity within the local watershed can be determined, which is information that cannot be obtained from either model alone.…”

“…As mentioned previously, a modular hydrologic-economic modeling framework was first conceptualized by Amaya et al (2021) to introduce the framework and demonstrate how RCOT, a physically constrained, I-O model is the most appropriate representation of an economic system to be coupled with HSPF, a deterministic, physically based watershed model using simple scenarios. In this study, these two existing models are coupled in this modeling framework to capture the seasonality of interactions between the economic and watershed systems.…”

“…However, when a modular approach is applied to hydrologic-economic modeling, established models representing the different systems with adequate complexity can be coupled together, but information from each model must be correctly transformed before it can be exchanged (Cai et al, 2003;Brouwer and Hofkes, 2008;Harou et al, 2009). In the modeling framework designed by Amaya et al (2021), the economic model, RCOT, represents resource inputs in mixed physical units and the critical linkages among economic sectors are columns of coefficients representing sectoral technologies. This inputoutput model is a constrained optimization model where the constraints represent physical limitations or government policies (Duchin and Levine, 2011).…”

A coupled agent-based model to analyse human-drought feedbacks for agropastoralists in dryland regions

“…Furthermore, several behavioral components can be influenced by external drivers (e.g., war, dynamic market prices related to crops and livestock and diseases), which could subsequently be included as additional modules. For example, since household assets (e.g., crop and milk sales) largely depend on fluctuating market prices, an economic model could be implemented to simulate such influences (Schreinemachers and Berger, 2011;Amaya et al, 2021). In addition, the influence of government policies and campaigns on the uptake of adaptation measures by pastoralists could be added.…”

Applying a Coupled Hydrologic-Economic Modeling Framework: Evaluating Alternative Options for Reducing Impacts for Downstream Locations in Response to Upstream Development

“…Specifically, elevated nitrogen concentrations and increased water withdrawal within the watershed, caused by upstream residential build-up or agricultural intensification, are evaluated under several scenarios. To conduct this analysis, the modular hydrologic-economic modeling framework, conceptualized in [20], is utilized to demonstrate that it can capture the interactions between economic and watershed systems at a finer spatial resolution than either administrative boundaries or watershed criteria, which expands the type of questions that may be addressed by either of the models coupled in this framework.…”