Using ecosystem services to represent the environment in hydro-economic models

Abstract

Demand for water is expected to grow in line with global human population growth, but opportunities to augment supply are limited in many places due to resource limits and expected impacts of climate change. Hydro-economic models are often used to evaluate water resources management options, commonly with a goal of understanding how to maximise water use value and reduce conflicts among competing uses. The environment is now an important factor in decision making, which has resulted in its inclusion in hydro-economic models. We reviewed 95 studies applying hydro-economic models, and documented how the environment is represented in them and the methods they use to value environmental costs and benefits. We also sought out key gaps and inconsistencies in the treatment of the environment in hydro-economic models. We found that representation of environmental values of water is patchy in most applications, and there should be systematic consideration of the scope of environmental values to include and how they should be valued. We argue that the ecosystem services framework offers a systematic approach to identify the full range of environmental costs and benefits. The main challenges to more holistic 2 representation of the environment in hydro-economic models are the current limits to understanding of ecological functions which relate physical, ecological and economic values and critical environmental thresholds; and the treatment of uncertainty.

Hydroeconomy in the context of climate change: Will it be a viable alternative to improve vegetation cover and water availability?

“…Un concepto central es que la demanda de agua no es un requisito fijo sino es la función donde la cantidad de agua que se utilice en diferentes momentos tiene valores diferenciados económicos totales y marginales (Harow, 2009). Los modelos hidroeconómicos son a menudo utilizados para evaluar las opciones de gestión de los recursos hídricos, normalmente con el objetivo de entender cómo maximizar el valor de uso de agua y reducir los conflictos entre los usos que compiten entre sí (Momblanch et al, 2016).…”

“…Se sostiene que los servicios ecosistémicos ofrecen un enfoque sistemático para identificar la gama completa de los costos y beneficios ambientales. Los principales retos de la representación holística del medio ambiente en los modelos hidroeconómicos son los límites actuales para la comprensión de las funciones ecológicas que se refieren a las características físicas, ecológicas y económicas y los valores umbrales críticos del medio ambiente; y el tratamiento de la incertidumbre (Momblanch et al, 2016). Un modelo hidroeconómico revela la planificación y costos de revisión de la infraestructura de suministro de agua en urbanizaciones y ciudades.…”

Improved modelling of the freshwater provisioning ecosystem service in water scarce river basins

“…The selection of the WAM depends on the data availability and the purpose of the study, but at least it should account for surface and groundwater interaction and abstraction, and be Once the water resources are allocated, economic functions are used to assign a value to the use of water. According to Momblanch et al (2016), production-based valuation methods should be used when the valued ES is a factor of production for a good or service traded on the market, while the aggregated willingness-to-pay is applied to establish the economic value of services that are goods whose market price does not include the impact of use on their availability for other users and the environment. In line with this, the marginal residual value of water for production is used to define the economic value of water for uses like agriculture and industry, whereas the aggregated willingness-to-pay is applied to establish the economic value of water for urban supply, recreation, and other final water uses (de Groot et al, 2002;Pulido-Velazquez et al, 2008).…”

“…In line with this, the marginal residual value of water for production is used to define the economic value of water for uses like agriculture and industry, whereas the aggregated willingness-to-pay is applied to establish the economic value of water for urban supply, recreation, and other final water uses (de Groot et al, 2002;Pulido-Velazquez et al, 2008). Commonly, hydroeconomic models make use of the so-called water demand curves for the different water uses to capture all this information (Momblanch et al, 2016). Demand curves relate the volume (usually annual) of water supplied (Mm 3 /year) to its unitary value (€/m 3 ); some examples can be found in Pulido-Velazquez et al (2006).…”

Benefits of Cooperation in Transnational Water-Energy Systems

“…In a typical formulation, hydrologic, agronomic and economic information are used to maximize (minimize) the benefits (costs) related to different water uses such as irrigation, hydropower, and industrial and domestic water use. Recent surveys of hydroeconomic models and their applications can be found in Bauer-Gottwein et al (2016), Booker et al (2012), Harou et al (2009) and Momblanch et al (2016).…”