Beyond piecewise methods: Modular integrated hydroeconomic modeling to assess the impacts of adaptation policies in irrigated agriculture
Introduction
Water withdrawals are increasing worldwide mainly due to population growth and economic development (UN, 2018); at the same time, climate change is expected to reduce water availability in many arid and semi-arid basins, notably those of the Mediterranean region and Middle East (high confidence) (IPCC, 2018). The combined effects of increasing demand and decreasing supply can potentially aggravate the economic and environmental impacts of water scarcity and droughts (World Bank, 2016). In this context, there is a growing pressure to formulate policies that reallocate available water resources among competing uses, so to mitigate economic losses and ensure enough resources are reserved for the public good (Grafton et al., 2018). Such demand-side approach can induce non-linear and non-trivial behavioral changes in economic agents that may “affect water and land management, change the trajectory of hydrologic systems, create feedback responses from human systems, and further impact water and land management practices” (Alam, 2015). Hence, addressing water scarcity challenges demands innovative integrated approaches to water resources research, and hydroeconomic modeling in particular (Loon et al., 2016; Pande and Sivapalan, 2017; Sivapalan et al., 2014).
Hydrologic and economic modeling play a critical role in defining adaptation strategies to water scarcity and droughts: they inform policy makers on the economic and environmental outcomes of projected policies, and the relevant tradeoffs between them, and help prevent maladaptation. Economics and civil engineering are historically kindred disciplines (Dupuit, 1844) that in the case of water resources management converge into the area of hydroeconomics. Optimization typically provides the mathematical link between the two disciplines: civil engineering/hydrology evaluates the costs of building, operating and maintaining water works and estimates water requirements; economics evaluates the utility-relevant attributes driving human responses to key stimuli, so to predict future adaptive behavior; and mathematically stated objective functions subject to physical and socioeconomic constraints resolve the water allocation problem (Harou et al., 2009). Based on how the hydrologic and economic sub-models interact to represent processes and decisions, hydroeconomic models can be broadly segregated into modular and holistic (Brouwer and Hofkes, 2008). Conventional holistic models typically estimate economic agents’ responses to policy shocks or other stimuli using an external economic sub-model, which is subsequently integrated in the architecture of the hydrologic model through piecewise equations. This offers the advantage of a more straightforward and effective representation of causal relationships and interdependencies, while reducing computational costs. On the other hand, the modular approach resolves the economic and hydrologic sub-models separately, connecting them in sequence. This offers increased probability of convergence to an optimal solution and potentially higher detail in the representation of each sub-field, which can be independently developed and adjusted. Both holistic and modular approaches have been applied to water resources planning and management in the past, albeit the former is prevalent given the supply-side emphasis of conventional water policy, where focus is placed on building, operating and maintaining water works to meet demands (Blair and Buytaert, 2016; Harou et al., 2009). However, where policies may induce behavioral responses that significantly impact the water system, as happens with demand-side approaches such as water pricing, markets or caps, “understanding and interpreting the human-modified water cycle requires the explicit inclusion of feedbacks between human and water systems” so to allow for a “richer understanding of coupled human-water system dynamics” that better represents water and land management operations (Sivapalan et al., 2014).
Relevant contributions towards a more detailed representation of agents’ autonomous adaptation behavior in complex human-water systems have been recently made in the area of socio-hydrology (Sivapalan and Blöschl, 2015). Socio-hydrology conceives complex human-water systems as “an ensemble of many elements”, where the different elements of the system are conceptualized through nested hierarchies of models that are able to “exchange and communicate” information (Blair and Buytaert, 2016). Such modular framework has the additional advantage of making possible the addition of nonlinearity to each element of the system, so that “surprises are not so surprising” and can be adequately understood (Levin et al., 2013) and explored using uncertainty analysis tools such as scenario discovery (Baldassarre et al., 2016). This does not mean that all the processes occurring in the human-water system need be full-fledged models. Depending on the problem at hand, subsystems can be grouped (e.g. hydrological and microeconomic systems) or divided. Also, while relevant subsystems can be represented through individual modeling components, use of single differential equations that relate the function with its derivatives is acceptable e.g. to represent less important elements (Sivapalan and Blöschl, 2015).
This paper builds socio-hydrology-inspired science by developing a methodological framework to couple a microeconomic Positive Multi-Attribute Utility Programming (PMAUP) model that represents the behavior of irrigators and simulates their adaptive responses (Gómez-Limón et al., 2016; Gutiérrez-Martín and Gómez, 2011) with a Hydrologic Modeling System (HEC-HMS) designed to simulate the rainfall-runoff processes of dendritic basins (CEIWR-HEC, 2018). While HEC-HMS is a popular tool for the development of hydrologic applications this is, to the best of our knowledge, the first study that uses HEC-HMS in concert with an agricultural economics module. The coupling between the PMAUP model and HEC-HMS occurs in a sequential fashion using protocols, i.e. “rules designed to manage relationships and processes between modules” (Csete and Doyle, 2002). Protocols enable the simulation of the interconnected dynamics and feedback responses between the microeconomic and hydrologic module through common spatial (crop portfolio and related land use changes) and water availability variables. To this end, we integrate farmers’ responses as predicted by the microeconomic module into the hydrological module through the explicit representation of crop portfolio/land use decisions and related irrigation water use and consumption in HEC-HMS; and use this information as an additional input to hydrologic simulations, thus allowing the assessment of the impacts of human agency on the water cycle and potential feedbacks.
The methods presented in this paper contribute to the literature on socio-hydrology and hydroeconomic research in three ways: 1) The modular integrated framework proposed in this paper rationalizes human-water system analysis and aspires to provide a more profound understanding and a more accurate representation of human agency and the feedbacks between human and water systems in dendritic basins. 2) We present a new set of bidirectional protocols based on land use and water availability variables to couple human and water systems and conceptualize the relevant two-way feedbacks happening between them. 3) The coupling is designed to be flexible, i.e. allowing for alternative microeconomic models to be used; and replicable, i.e. to involve alternative hydrologic models by adapting the coupling variables. The flexibility and replicability of the proposed approach, combined with recent advances in socio-hydrology through protocols and modularity (see e.g. Essenfelder et al., 2018; Esteve et al., 2015), are instrumental towards the development of uncertainty assessments that go beyond conventional scenario discovery to include multi-system ensemble experiments that sample parameter and structural uncertainties in socio-hydrology modeling.
Section snippets
The microeconomic module: Positive Multi-Attribute Utility Programming (PMAUP)
Human agency in agricultural water management and water resources allocation is typically represented through microeconomic modeling approaches (Graveline, 2016). Microeconomic models are a mathematically stated representation of the behavior of socioeconomic agents that can be used to understand and predict their responses to key stimuli, given a number of physical and/or socioeconomic restrictions (i.e. domain). Rational agents in microeconomic models are capable of resolving complex input
Case study area: the Upper Tagus River Basin in Spain
The capabilities of the integrated PMAUP and HEC-HMS model are illustrated by simulating the impacts of selected drought episodes and their corresponding irrigation restrictions as foreseen under the new Drought Management Plan (DMP) of the Upper Tagus River Basin (UTRB) in the center of the Iberian Peninsula (TRBA, 2018). DMPs are a regulatory drought adaptation strategy that define drought indices and thresholds, establish priorities among uses and strengthen water allocation constraints
Microeconomic/PMAUP module
Following Gómez-Limón et al. (2016), Gutiérrez-Martín and Gómez (2011) and Pérez-Blanco and Gutiérrez-Martín, 2017, we explore the relevance of five attributes in the PMAUP model (]), namely expected profit (z1), risk avoidance (z2) and management complexity avoidance, the latter being measured through three proxy variables (z3, z4 and z5). These attributes are defined in Annex III in the online supplementary material. Table 3 presents data inputs to the
Conclusions
In the Anthropocene, the epoch where humans are causing significant impact on the geology and ecosystems of the planet Earth, natural systems cannot be properly studied and understood in isolation from human systems; and vice-versa. In a context of growing water scarcity, water resources reallocation policies may induce behavioral responses on the human system with non-trivial feedbacks on the water system and related natural systems. This paper develops a modular integrated hydroeconomic PMAUP
Declaration of competing interest
The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.
Acknowledgments
The research leading to these results has been developed with the support of the Program for the Attraction of Scientific Talent's SWAN (Sustainable Watersheds: Emerging Economic Instruments for Water and Food Security) Project, and of the Ministerio para la Transición Ecológica y el Reto Demográfico, through Fundación Biodiversidad (ATACC Project - Adaptación Transformativa al Cambio Climático en el Regadío).
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