Integrating ecosystem benefits for sustainable water allocation in hydroeconomic modeling

Abstract

The increasing concern about the degradation of water-dependent ecosystems calls for considering ecosystems benefits in water management decision-making. Sustainable water management requires adequate economic and biophysical information on water systems supporting both human activities and natural ecosystems. This information is essential for assessing the impact on social welfare of water allocation options. This paper evaluates various alternative water management policies by including the spatial and sectoral interrelationships between the economic and environmental uses of water. A hydroeconomic model is developed to analyze water management policies for adaptation to reduced water availability in the Ebro Basin of Spain. The originality in our contribution is the integration of environmental benefits across the basin, by using endemic biophysical information that relates stream flows and ecosystem status in the Ebro Basin. The results show the enhancement of social welfare that can be achieved by protecting environmental flows, and the tradeoffs between economic and environmental benefits under alternative adaptation strategies. The introduction of water markets is a policy that maximizes the private benefits of economic activities, but disregards environmental benefits. The results show that the current institutional policy where stakeholders cooperate inside the water authority, provides lower private benefits but higher environmental benefits compared to those obtained under water markets, especially under severe droughts. However, the water authority is not allocating enough environmental flows to optimize social welfare. This study informs strategies for protection of environmental flows in the Ebro Basin, which is a compelling decision under the imminent climate change impacts on water availability in coming decades.

Challenges to Water Resource Management—Role of Economic and Modeling Approaches

“…Several papers demonstrate this relatively new trend. Crespo et al [180,181] develop an HEM to assess the value of environmental flow in the Ebro Basin in Spain. Levers et al [182] develop an HEM to assess the effects of buying water for the environment in the Salton Sea in California.…”

Nature-based solutions for floods AND droughts AND biodiversity: Do we have sufficient proof of their functioning?

“…Conceptual models such as the Framework of Analysis (Van Beek et al, 2022) can provide guidance to inclusive decision-making processes in integrated water management. As part of this overarching process numerical biophysical and socio-economic models help in the scientific underpinning of describing and quantifying the performance of NbS under different settings and scenario's (e.g., Crespo et al, 2022;Fennell et al, 2022). Over the last decade, significant improvements have been made to allow for inclusion of ecohydraulic processes in many of the standard hydro-morphodynamic software packages with a focus on processes related to instream flow-vegetation-sediment interaction (e.g., Van Oorschot et al, 2016;Willemsen et al, 2022).…”

Optimizing Multi-Scenario Water Resource Allocation in Reservoirs Considering Trade-Offs between Water Demand and Ecosystem Services

“…The abundance or scarcity of water resources affects the development and expansion of economic activities. Adequate water resources can meet human domestic and agricultural irrigation needs while providing a sustainable and stable source of funding for ecosystems, maintaining ecological balance, and ensuring the health of ecosystem services [12,13]. To achieve sustainable economic and social development for humanity, the preservation and judicious utilization of water resources serve as effective facilitators.…”