Economic and Ecological Rules for Water Quality Trading1

Horan, Richard D. and James S. Shortle, 2011. Economic and Ecological Rules for Water Quality Trading. Journal of the American Water Resources Association (JAWRA) 47(1):59‐69. DOI: 10.1111/j.1752‐1688.2010.00463.x Abstract: Emissions trading in textbook form uses markets to achieve pollution targets cost‐efficiently. This result is accomplished in markets that regulators can implement without knowing pollution abatement costs. The theoretical promise of emissions trading, along with real‐world success stories from air emissions trading, has led to initiatives to use trading for water pollution control. Yet, trading, particularly when it involves nonpoint sources of pollution, requires significant departures from the textbook concept. This paper explores how features of water quality problems affect the design of markets for water pollution control relative to textbook emissions markets. Three fundamental design tasks that regulators must address for pollution trading to achieve an environmental goal at low cost are examined: (1) defining the point and nonpoint commodities to be traded, (2) defining rules governing commodity exchange, and (3) setting caps on the commodity supplies so as to achieve an environmental target. We show that the way in which these tasks are optimally addressed for water quality markets differs significantly from the textbook model and its real‐world analogs. We also show that the fundamental appeal of emissions trading is lost in the case of realistic water quality markets, as market designs that reduce the costs of achieving water quality goals may no longer be implementable without the regulatory authority having information on abatement costs.     

DESALTING SALINE WATER FOR IRRIGATION A CASE STUDY,COACHELLA AREA,CALIFORNIA1

ABSTRACT .A case study was performed to evaluate potential applications of desalted saline water for agriculture using 2 distillation type processes and 2 membrane type processes. The investigation determined the costs and benefits associated with desalting saline water at concentrations of 1,500, 900, 400, 200, and 50 ppm. Benefits from desalting are generated by shifts to more profitable crops, reduced costs for drainage, and reduction in fertilizer and labor requirements with better quality water. Costs are based on the project features such as desalting plants, raw water diversion facilities, storage reservoirs, conveyance and distribution systems, brine disposal, blending facilities, and gypsum addition systems. Hydrologic studies determined the crop irrigation requirements, water demand schedules, desalted water storage requirements, brine disposal requirements, and size of facilities required. Reconnaissance design layouts were made for producing desalted water using a combination of 14 schemes. The study also included a review of irrigation practices. The benefit-cost ratios range from 0.4 to 1.0 for 1,500 ppm irrigation water to 0.8 to 1.0 for 50 and 200 ppm water. Investment costs per acre are high, ranging from $12,900 to $20,900. Irrigation benefits are based on the increase in production from a desert condition with no water supply to the irrigation conditions studied.     

Application of game theory for a groundwater conflict in Mexico

Exploitation of scarce water resources, particularly in areas of high demand, inevitably produces conflict among disparate stakeholders, each of whom may have their own set of priorities. In order to arrive at a socially acceptable compromise, the decision-makers should seek an optimal trade-off between conflicting objectives that reflect the priorities of the various stakeholders. In this study, game theory was applied to a multiobjective conflict problem for the Alto Rio Lerma Irrigation District, located in the state of Guanajuato in Mexico, where economic benefits from agricultural production should be balanced with associated negative environmental impacts. The short period of rainfall in this area, combined with high groundwater withdrawals from irrigation wells, has produced severe aquifer overdraft. In addition, current agricultural practices of applying high loads of fertilizers and pesticides have contaminated regions of the aquifer. The net economic benefit to this agricultural region in the short-term lies with increasing crop yields, which requires large pumping extractions for irrigation as well as high chemical loading. In the longer term, this can produce economic loss due to higher pumping costs (i.e., higher lift requirements), or even loss of the aquifer as a viable source of water. Negative environmental impacts include continued diminishment of groundwater quality, and declining groundwater levels in the basin, which can damage surface water systems that support environmental habitats. The two primary stakeholders or players, the farmers in the irrigation district and the community at large, must find an optimal balance between positive economic benefits and negative environmental impacts. In this paper, game theory was applied to find the optimal solution between the two conflicting objectives among 12 alternative groundwater extraction scenarios. Different attributes were used to quantify the benefits and costs of the two objectives, and, following generation of the Pareto frontier or trade-off curve, four conflict resolution methods were then applied.     

REUSE OF POWER PLANT COOLING WATER FOR IRRIGATION1

ABSTRACT: Current water quality policies in California require disposal of saline blowdown waters from power plants in sealed evaporation ponds to avoid degradation of ground waters. This policy highlights the conflict between increased energy demands, increasing scarcity of water, and environmental priorities. Saline blowdown waters can be used for the irrigation of salt tolerant crops, albeit with some reduction in yields. The results of experiments intended to specify these yield reductions are reported. If such irrigation is carefully managed, the soil profile can be used to store residual salts and ground water degradation will be avoided, provided that irrigation ceases before the salts are leached to the ground water. An analysis of discharge below a carefully managed irrigation project shows that the downward movement of salts below the root zone is no worse than with conventional methods of disposal. Thus, irrigation reuse with blowdown water is shown to be a viable means of saline water disposal while maintaining existing standards of ground water quality protection. Further analysis demonstrates the economic feasibility of such irrigation reuse by showing that it is significantly less costly than the evaporation pond alternative.     

DETERMINATION OF BEST TIMING FOR POULTRY WASTE DISPOSAL: A MODELING APPROACH1

ABSTRACT: Confined production of poultry results in significant volumes of waste material which are typically disposed of by land application. Concerns over the potential environmental impacts of poultry waste disposal have resulted in ongoing efforts to develop management practices which maintain high quality of water downstream of disposal areas. The timing of application to minimize waste constituent losses is a management practice with the potential to ensure high quality of streams, rivers, and lakes downstream of receiving areas. This paper describes the development and application of a method to identify which time of year is best, from the standpoint of surface water quality, for land application of poultry waste. The procedure consists of using a mathematical simulation model to estimate average nitrogen and phosphorus losses resulting from different application timings, and then identifying the timings which minimize losses of these nutrients. The procedure was applied to three locations in Arkansas, and three different criteria for optimality of application timing were investigated. One criterion was oriented strictly to water quality, one was oriented only to crop production, and the last was a combination. The criteria resulted in different windows of time being identified as optimal. Optimal windows also varied with location of the receiving area. The results indicate that it is possible to land-apply poultry waste at times which both minimize nutrient losses and maximize crop yield.     

RECHARGE OF THE SNAKE RWER PLAIN AQUIFER: TRANSITIONING FROM INCIDENTAL TO MANAGED1

ABSTRACT: Declining ground-water levels and spring discharges have heightened water user concerns about the sustainability of the Snake River Plain aquifer in southern Idaho. Diminished recharge from surface water irrigation and increased irrigation pumping have been depleting the aquifer at a rate of about 350,000 acre-feet/year. Previously, aquifer conditions were treated as an uncontrollable consequence of weather and development activities. With increasing competition for available water, the State appears to be progressing through a three-stage process of recharge management. The first stage is that which has occurred historically, where recharge is largely an incidental effect of surface water irrigation. The second stage is the implementation of intentional recharge with little regard to identifying or maximizing benefits. Idaho has been at this stage for the past few years. The State is entering a third stage in which recharge sites will be located and designed to meet specific water user and environmental objectives. Preliminary estimates using numerical and analytical models demonstrate that managed recharge within a few miles of the river will result in short-term increases in spring discharge. More distant recharge sites are needed to provide longer-term benefits. The primary challenge facing implementation of the managed recharge program will be the balancing of economic and environmental costs and benefits and to whom they accrue.     

WATER REUSE FROM SEWAGE EFFLUENT BY IRRIGATION: A PERSPECTIVE FOR HAWAII1

ABSTRACT: Surrounded by an ocean, the Hawaiian Islands are limited in their natural fresh water resources. The major readily developable potable sources are the high quality ground water sources which serve both domestic uses and sugarcane irrigation although irrigation water does not require as high a quality as drinking water. The increasing overall fresh water requirements for the island of Oahu will outstrip the potential yield of fresh ground water sources, as developed by present technology, by the year 2000 according to Honolulu Board of Water Supply projections. There are water shortage regions on other islands. Water reuse from sewage effluent for irrigation will augment natural water resources, furnish supplemental or alternative fertilizer, and reduce ocean water pollution and the costs of engineering systems. In cooperative field testing from 1971 to 1975, it was demonstrated that effluent can be applied as supplemental water for furrow irrigation of sugarcane without detriment to ground water quality and sugar yield. Studies are in progress to test different dilutions of effluent and its use with chemical ripeners to improve crop yield. Sugarcane plantations on Oahu, Maui, and Kauai are in various stages of water reuse by effluent irrigation. Reuse is presently practiced for irrigation of golf courses and is being planned for forage crops in Hawaii.     

SUBSURFACE RETURN FLOW AND GROUND WATER RECHARGE OF TERRACE FIELDS IN NORTHERN TAIWAN1

ABSTRACT: This study estimates subsurface return flow and effective ground water recharge in terraced fields in northern Taiwan. Specifically, a three dimensional model, FEMWATER, was applied to simulate percolation and lateral seepage in the terraced fields under various conditions. In the terraced paddy fields, percolation mainly moves vertically downward in the central area, while lateral seepage is mainly focused around the bund. Although the simulated lateral seepage rate through the bund exceeded the percolation rate in the central area of the paddy field, annual subsurface return flow at Pei‐Chi and Shin‐Men was 0.17 × 10⁶ m³ and 0.37 × 10⁶ m³, representing only 0.17 percent and 0.21 percent of the total irrigation water required for rice growth at Pei‐Chi and Shin‐Men, respectively. For upland fields, the effective ground water recharge rate during the second crop period (July to November) exceeded that during the first crop period (January to May) because of the wet season in the second crop period. Terraced paddy fields have the most efficient ground water recharge, with 21.2 to 23.4 percent of irrigation water recharging to ground water, whereas upland fields with a plow layer have the least efficient ground water recharge, with only 4.8 to 6.6 percent of irrigation water recharging to ground water. The simulation results clearly revealed that a substantial amount of irrigation water recharges to ground water in the terraced paddy, while only a small amount of subsurface return flow seeps from the upstream to the downstream terraced paddy. The amounts of subsurface flow and ground water recharge determined in the study are useful for the irrigation water planning and management and provide a scientific basis to reevaluate water resources management in the terrace region under irrigated rice.     

ECONOMIC ANALYSIS OF WATER-SAVING TECHNIQUES IN IRAN1

ABSTRACT: The possibility of increasing the water supply for irrigation through adoption of more efficient water-application techniques as an alternative to new irrigation projects was studied in an irrigated region of Iran. Excessive water application at the farm level ranks high among the causes of water shortages in the selected region. An empirical analysis of the effect of water-saving technology on the farm operator's net return was made choosing two farms in the region as a case study. The problems facing these farms are common to most farms throughout the country. The results of the budgeting analysis of the selected farms indicated that an improvement in irrigation technique can result in the expansion of water supply and higher marginal value product for water. Comparing the costs of irrigation systems with the net returns resulting from the higher efficiency showed that such an investment is economically feasible.     

WATER MANAGEMENT AND N,P LOSSES FROM PADDY FIELDS IN SOUTHERN KOREA1

ABSTRACT: Assessment and control of nutrient losses from paddy fields is important to protect water quality of lakes and streams in Korea. A four‐year field study was carried out to investigate water management practices and losses of nitrogen (N) and phosphorus (P) in rice paddy irrigation fields in southern Korea. The amount and water quality of rainfall, irrigation, surface drainage, and infiltration were measured and analyzed to estimate inputs and losses of N and P. The observed irrigation amount surpassed consumptive use, and approximately 52 to 69 percent of inflow (precipitation plus irrigation) was lost to surface drainage. Field data showed that significant amounts of irrigation water and rainfall were not effectively used for rice paddy culture. Water quality data indicated that drainage from paddy fields could degrade the recipient water environment. The nutrient balance indicated that significant amounts of nutrients (29.5 percent of total N and 8.6 percent of total P compared to input) were lost through surface drainage. Furthermore, up to half the nutrient losses occurred during nonstorm periods. The study results indicate that inadequate water management influences N and P losses during both storm and nonstorm periods. Proper water management is required to reduce nutrient losses through surface drainage from paddy fields; this includes such measures as minimum irrigation, effective use of rainfall, adoption of proper drainage outlet structures, and minimized forced surface drainage.     

THE IMPORTANCE OF SOIL IN EVALUATING POTENTIAL WASTE WATER DISPOSAL SITES IN THE MISSOURI OZARKS1

ABSTRACT: A number of criteria can be used in the selection of an area for the irrigation disposal of secondary treated waste water. The inherent capacity of the surface soil to retain, or at least detain, the various nutrient ions passing through the profile in the percolating waters becomes the prime consideration in regions with shallow water tables or in Karst areas such as the Missouri Ozarks where the risk of ground water supply contamination is high. A comprehensive study of the nutrient renovation potential of several soils was undertaken at a proposed effluent irrigation site along the Ozark National Scenic Riverways in south central Missouri. The surface soil hydrology was evaluated employing selected soil water parameters. Exchange equilibria studies determined the retention capacity for Ca and Mg while the concentrations of other selected ions were analyzed in the soil water to measure their retention time and net removal. The movement of a bromine tracer was monitored as an index of the renovation capacity of these soils for the more mobile anions such as nitrate. Neutron activation analysis proved to be a useful tool in the water quality analyses. All surface soil profiles demonstrated some degree of nutrient renovation for the various nutrients studied.     

The economics of land application of fresh and composted broiler litter with an environmental constraint

Land application of broiler litter is a common disposal method due to its value as a fertiliser substitute, but presents potential environmental problems because of nutrient runoff. Composting has been suggested as an alternative due to the formation of more stable organic components. The land application of fresh and composted broiler litter are compared as alternative disposal methods. The costs of land application of broiler litter are dominated by spreading because of low nutrient densities relative to commercial fertilisers. Composting broiler litter before land application appears to be substantially less economically attractive than land application of fresh broiler litter because of high costs of production and higher spreading costs due to even lower nutrient density. However, when environmental constraints are placed on the phosphorus concentration from hayfield runoff, composting becomes a more attractive alternative. Composting becomes more viable as the land base for application becomes smaller relative to broiler production; as alternative disposal costs for litter become higher; and as environmental constraints become stricter.     

Hydraulic management of a soil moisture controlled SDI wastewater dispersal system in an Alabama Black Belt soil

Rural areas represent approximately 95% of the 14000 km(2) Alabama Black Belt, an area of widespread Vertisols dominated by clayey, smectitic, shrink-swell soils. These soils are unsuitable for conventional onsite wastewater treatment systems (OWTS) which are nevertheless widely used in this region. In order to provide an alternative wastewater dosing system, an experimental field moisture controlled subsurface drip irrigation (SDI) system was designed and installed as a field trial. The experimental system that integrates a seasonal cropping system was evaluated for two years on a 500-m(2) Houston clay site in west central Alabama from August 2006 to June 2008. The SDI system was designed to start hydraulic dosing only when field moisture was below field capacity. Hydraulic dosing rates fluctuated as expected with higher dosing rates during warm seasons with near zero or zero dosing rates during cold seasons. Lower hydraulic dosing in winter creates the need for at least a two-month waste storage structure which is an insurmountable challenge for rural homeowners. An estimated 30% of dosed water percolated below 45-cm depth during the first summer which included a 30-year historic drought. This massive volume of percolation was presumably the result of preferential flow stimulated by dry weather clay soil cracking. Although water percolation is necessary for OWTS, this massive water percolation loss indicated that this experimental system is not able to effective control soil moisture within its monitoring zone as designed. Overall findings of this study indicated that soil moisture controlled SDI wastewater dosing is not suitable as a standalone system in these Vertisols. However, the experimental soil moisture control system functioned as designed, demonstrating that soil moisture controlled SDI wastewater dosing may find application as a supplement to other wastewater disposal methods that can function during cold seasons.     

Mining economics and the environment

A mining operation can affect the environment adversely and create costs to others that are external to the mining firm, if no constraints are imposed. To deal with this problem of externalities, various regulatory steps can be taken, eg effluent taxation, subsidies, regulation of emissions by command, and use of emission permits that are tradeable. Bargaining between the polluter and the damaged party over the level of production and compensation remains a more theoretical option. Regardless of what regulatory approach is adopted to transform external costs into internal costs, the resulting higher costs will have an impact on the decisions of a mining firm. Information processes, traditionally focused on finding deposits, have now been broadened to include an environmental dimension. Operating practices can be modified to reflect the need for stable long-term solutions of waste disposal problems. On the industry level, environmental regulation may lead to sterilization of resources, to higher prices for some commodities and to distortions of competitiveness among commodity producing countries.     

DECISION PARAMETERS FOR COMBINED USE OF EFFLUENT DISCHARGES,SURFACE FLOWS,AND GROUND WATER1

ABSTRACT: Decision parameters affecting combined use of effluent discharges and surface flows and ground water available at Gillespie Dam on the Gila River in Arizona are identified and analyzed. Hydrologic, economic, legal, and institutional parameters are considered separately and in combination. The interrelationships of irrigation subsystems, water use functions, institutional involvement, economic and legal constraints are illustrated. Recent hydrologic studies indicate that the natural flow of the Gila River will increase with the discharge of Phoenix sewage effluent and then there will be a drastic decline when the Palo Verde Nuclear Generating Station commences in 1985. Competition for any increases in effluent discharges and surface flows could be ameliorated through the combined efforts of existing or reorganized entities resulting in sharing of costs and benefits. The analysis leads to recommendations concerning joint use of facilities, proration of fixed and variable costs, and creation of a mutual water company.     

A CONCEPTUAL FRAMEWORK FOR EVALUATING AGRICULTURAL WATER CONSERVATION POTENTIALS1

ABSTRACT: This paper defines types of water losses in irrigated agriculture and outlines potentials for water conservation. Recoverable water “losses” (seepage, leakage, and spillage during storage and conveyance, and surface runoff and deep percolation during irrigation) and irrecoverable losses (evaporation from water and soil surfaces and transpiration from plants) are described and illustrated. Some conservation terms are defined, particularly the distinction between on-farm irrigation efficiency and areawide efficiency. Briefly reviewed are agricultural water conservation technologies and their applicability. The biggest untapped potential for water conservation may be a reduction in irrecoverable losses, especially evapotranspiration. The advantages and disadvantages of reducing recoverable and irrecoverable water losses are described, including possible effects on ground water, energy, salinity, crops, wildlife, and in-stream uses. Such information may be useful in several policy and management issues, e.g., ground water overdraft and possible constraints on crops and sites to be irrigated.     

Salt enrichment of municipal sewage: New prevention approaches in Israel

Wastewater irrigation is an environmentally sound wastewater disposal practice, but sewage is more saline than the supplied fresh water and the salts are recycled together with the water. Salts have negative environmental effects on crops, soils, and groundwater. There are no inexpensive ways to remove the salts once they enter sewage, and the prevention of sewage salt enrichment is the most immediately available solution. The body of initiatives presently structured by the Ministry of the Environment of Israel are herein described, with the aim to contribute to the search for a long-term solution of salinity problems in arid countries. The new initiatives are based on: (1) search for new technologies to reduce salt consumption and discharge into sewage; (2) different technologies to cope with different situations; (3) raising the awareness of the public and industry on the environmental implications of salinity pollution; and (4) an elastic legal approach expressed through new state-of-the-art regulations. The main contributor to the salinity of sewage in Israel is the watersoftening process followed by the meat koshering process. Some of the adopted technical solutions are: the discharge of the brine into the sea, the substitution of sodium by potassium salts in the ion-exchangers, the construction of centralized systems for the supply of soft water in industrial areas, the precipitation of Ca and Mg in the effluents from ion-exchangers and recycling of the NaCI solution, a reduction of the discharge of salts by the meat koshering process, and new membrane technology for salt recovery.     

SOCIAL OVERHEAD CAPITAL COSTS OF IRRIGATION DEVELOPMENT IN WASHINGTON STATE1

ABSTRACT: Increased irrigation as a means of achieving economic development can impose significant social costs on the state or region of growth. The growth in population induced by additional irrigation will require new roads, water and sewage facilities, schools, fire and police protection, etc. Also the increased energy demands due to irrigation and growth in economic activity must be met. Capital investments required to service these needs of new development can become very large. This study attempts to measure such social overhead costs or irrigation development for some specific irrigation project areas of Eastern Washington. It is shown that investment costs in overhead items can reach $2,000 per acre irrigated or $70,000 per job created. Alternatively, the annual costs can equal $180 per acre or $6,700 per worker. These costs must be paid locally through increased taxes, utility rates, or costs for services.     

Economic and Environmental Analysis of Retrofitting a Large Office Building with Energy-Efficient Lighting Systems

An evaluation of the economic and environmental costs and benefits that would result if the Zorinsky Federal Building, located in Omaha, Nebraska, USA, converted its current lighting system to a more energy-efficient system (i.e., joined the EPA's Green Lights Program) was conducted. Lighting accounts for 20–25 percent of all electricity sold in the United States. Costs considered in the study included the cost of retrofitting the building's existing lighting system and the cost of disposal of the current lamps and ballast fixtures. Benefits included a reduction of electric utility costs and a reduction of emissions of SO₂, NO _x , CO₂, and CO from electric utility power plants. Environmental and health issues for air pollutant emissions were also addressed. The results showed that significant reductions in utility bills as well as reductions in air emissions would result from a major building converting to a more energy efficient lighting system. The results showed that conversion of this large building would reduce SO₂ emissions by 14.6 tons/yr and NO _x emissions by 6.3 tons/yr. In addition, the conversion would reduce annual energy costs by approximately $114,000.     

Packaging waste and the polluter pays principle: a taxation solution

Packaging waste has become a focus for attention by policy‐makers in a number of countries. This article offers a simple policy measure — a packaging tax or levy — which serves the required aims of policy, namely: reducing waste at source; increasing the rate of recycling; and consistency with the polluter pays principle. The tax is illustrated in the context of beverage containers in the UK and Japan. The merits of the proposal are its simplicity and flexibility. The article suggests that the relevant environmental damages are captured by waste disposal costs and litter. Other life cycle impacts, such as emissions from energy use, could be included but only if there are not more efficient ways of regulating them.