PRIMARY AND SECONDARY IMPACTS OF A WATER RESOURCE DEVELOPMENT PROJECT1

ABSTRACT: At a time in history when water resource development in the United States is being condemned as both economically inefficient and an environmental disaster, perhaps economists need to look back at previous development to see what the fruits of water development (be they sweet or sour) have been. The Boise Project of south-western Idaho is 70 years old and to some people it represents a gross error in resource use, while to others it represents a means of livelihood and well being. A recent research project at the University of Idaho attempted to measure not only the direct economic income benefits of the project (from irrigation), but also the indirect or secondary income benefits (from the food processing industry). Periodic regional input-output tables were constructed to assess the income generated from irrigation and food processing over the period from 1946 to 1970. Input-output analysis allowed researchers to evaluate the direct and indirect impacts of both the irrigation sector and the food processing sector and to compare their growth over time.     

ECONOMIC APPRAISAL OF A GROUND WATER DEVELOPMENT PROJECT1

A ground water development project in the northern part of Thailand was appraised by means of benefit-cost analysis. This is the first project in Thailand to develop ground water for irrigation purposes and it is also the first project which made use of an underground PVC pipe water distribution system. Results indicate that the project is economically feasible. In comparing different water distribution systems, it is also found that distribution by means of underground PVC pipes is more economical compared to an open ditch system if the life of the latter is relatively short and the rates of inflation are high.     

THE ENHANCED ROLE OF WATER CONSERVATION IN THE COST-BENEFIT ANALYSIS OF WATER PROJECTS1

The concept of water conservation has increased in importance because of revisions in the rules and procedures for performing cost-benefit analyses of federal water projects. These revisions include a requirement that nonstructural and water conservation measures be incorporated into economic assessments of projects. Project analyses will now proceed as if water supplies were allocated “most effectively,” that is, to their highest valued uses. A related requirement provides that the net benefits of any project should now be valued using willingness to pay measures. A specific cost-benefit methodology accommodating the revisions is constructed and discussed. Informational requirements for applying this methodology are identified. In addition to being consistent with federal mandates, this technique offers important advantages over the traditional “requirements” approach to water supply planning.     

ECONOMIC GROWTH THROUGH WATER RESOURCE DEVELOPMENT: INDIA1

ABSTRACT India's multidimensional water development programs have contributed significantly to the promotion of the country's economic growth. Rapid growth of irrigation has substantially increased agricultural production. Hydro power generation has doubled during the last two decades, and this has accelerated industrialization and extended rural electrification. Minor irrigation has taken on a new importance in the Fourth Five Year Plan, signifying a departure from the earlier Plans. “Green Revolution” owes a large measure of its success to the availability of assured water supplies. Water development projects have also generated tremendous employment opportunities. Despite its pronounced impact on the economy, India's water planning strategy has some glaring weaknesses: the failure to incorporate “indirect benefits” in cost-benefit calculations; the under-utilization of water potential; and, the progressive increase in the cost of irrigating an acre of land. The prevailing institutional structure in India constitutes a major deterrent to the diffusion of the benefits of water development. There are stubborn psychological factors which render the adoption of innovative irrigation practices difficult. There is thus an overwhelming need to revamp India's institutional framework. On balance, however, water development in India has made its impact felt on India's myriads of villages. And from the arid “dust bowls” of India new life has emerged.     

A PROBABILISTIC BENEFIT-COST ANALYSIS OF A ZONING PROGRAM FOR FLOOD PLAINS1

ABSTRACT: Various techniques, one of which is zoning, are used to control the extent of flood damage. The benefit-cost analysis of zoning programs must take into account the random nature of flooding. This paper outlines a method for determining not only the expected value of the benefit-cost ratio, but also the probability of such a zoning program being profitable. It also presents an application of the method to the assessment of the Outaouais Regional Community zoning program.     

FINANCING PRIVATE WATER RESOURCE DEVELOPMENT: ANALYSIS OF A STATE LOAN PROGRAM1

ABSTRACT. A State loan program was analyzed for its effects on groundwater development in Wyoming. The analysis focused on the effects of low-interest State financing on the economic feasibility of investments in center-pivot sprinkler irrigation systems. The feasibility analysis indicated that investments in sprinkler systems for production of cash crops are highly profitable, and would frequently be carried out whether or not the State loan program were available. Investments in sprinklers for production of forage crops are perhaps frequently made attractive by the loan program. Thus, while the program appears to have accelerated the pace of private water resource development in Wyoming, it has also subsidized some investments that would have been carried out regardless of the program's existence. Further analysis indicated that sprinkler investments carried out with State financing contribute substantially to firm growth when cast crops are grown, but have less marked, and sometimes negative, effects on growth when forage crops are produced. Some positive effects of the loan program on southeast Wyoming's regional economy were noted, though a complete empirical analysis of regional impacts was beyond the scope of the study.     

DEVELOPMENT OF AN INTERDISCIPLINARY PLANNING MODEL FOR WATER AND FISHERY MANAGEMENT1

ABSTRACT: This paper describes the development of an interdisciplinary model that analyzes the effects of resource management decisions on New Mexico fishery production, yield, sportfishing effort, and economic benefit to anglers. The model recreates river flows and materials transported through reservoirs and their tailwaters from 1974 through 1987. Solar radiation, water temperature, phosphorus, nitrogen, suspended solids, and water exchange rates determine primary production. Organic loads from watershed sources, added to primary production, form a trophic base for sportfish forage. Fish production is partitioned into biomass and growth of each age class in sportfish and forage fish groups by differential responses to food type, light, water-level fluctuation and predation. Fish biomass, with angler population distribution and site condition, contributes to determining angler effort and economic benefits. Model users can vary and analyze water level and quality, stocking, fishing regulations, site access, site facilities, and site entry fees. The model (on floppy disks with a user manual) is available for operation on MS DOS compatible computers with a hard disk. Contact R. M. Wilson, NMGF, State Capitol, Santa Fe, New Mexico, 87503.     

CULTURAL ASPECTS OF WATER RESOURCE DEVELOPMENT PAST,PRESENT, AND FUTURE1

ABSTRACT Attitudes toward the development of the American West have undergone important changes over the past century just as the nature of water resources as factors in development have changed. Viewing these changes processually, stages for water resources definition and use can be identified in the total process of western cultural development. The first stage involves the value of water resource development as a stimulus to population and economic growth in the West. The second stage, still in process', adopts a dominant cultural norm which sees water resource development as inevitable if not necessary to keep up with growth. A third stage to this evolutionary process is incipient. Future cultural values and thinking with respect to water resource development will be to look at development as a means for controlling or managing both the location and quantity of population and economic growth. To this end planners will have to become concerned with the questions of human adaptation. Concern will have to be given to the problems of getting a living which enables individuals to meet the subsistence needs of self and family, to establishing community which provides for cooperation among individuals and the management of conflict, to establishing improved communication which promotes interpersonal interaction, and for fostering innovation which provides the new ideas necessary to adapt to new environmental situations.,     

EVALUATING DIRECT BENEFIT ESTIMATION PROCEDURES FOR IRRIGATION PROJECTS: A SIMPLIFIED APPROACH1

ABSTRACT: An integral part of evaluating the net benefits generated by an existing or proposed irrigation project is the assessment of the associated impacts in commodity markets. Traditionally, these impacts have been measured by either assuming no change in commodity prices and calculating net returns to project farmers, or by allowing commodity prices to fall in accordance with a given elasticity of demand and subtracting commodity production costs from the associated area under the commodity demand curve. In either case, it is implicitly assumed that supply is perfectly inelastic. This article establishes that traditional approaches to measuring direct benefits are biased. Formulae are presented for calculating the maximum absolute and relative error which may result from using these techniques as a function of project size. Direct benefit estimates are then evaluated for three irrigation projects in Nebraska, illustrating how these results can be used to improve project evaluation procedures.     

AESTHETIC PREFERENCE FOR WATER RESOURCE PROJECTS: AN APPLICATION OF Q METHODOLOGY1

ABSTRACT Many of the resources generating aesthetic and visual benefits are publically owned and their optimum use and development depends upon public investment. Traditionally, public investment decisions have been couched in economic terms requiring quantitative measurement of benefits and costs. Since many of the benefits these resources provide are not consumed when they are enjoyed, the total contribution of the resource is imperfectly measured in the usual market sense. Thus, if the provision of these public goods is left to the conventional market mechanism, less than socially optimal investment may occur. This study was designed to investigate whether aesthetic preferences related to water projects could be determined, and whether they differ among different groups of people. A Q sort of 44 photographs of a wide variety of water development projects was conducted with two groups, i.e., photographers (aesthetic man) and town assessors (economic man). The resultant analysis identified two significant factors. Factor 1 provided insight into a hypothesis of nature dominant or man dominant scenes. Factor 2 indicated that the respondents had a negative preference for projects which were in varying stages of completion or appeared to be polluted. Preferences were consistent between the two groups tested. The test revealed that people do not necessarily equate only naturalness with aesthetic appeal, but will accept development as aesthetic, provided that it is designed to complement the natural landscape.     

ECONOMIC RESOURCE MULTIPLIERS FOR REGIONAL IMPACT ANALYSIS1

ABSTRACT: Tradeoffs between regional economic development and resource use is a question often confronting local decisionmakers. A resource-interindustry model can be used to depict the interrelationships between regional economic sectors as to household income and/or employment and resource use. A resource-interindustry model was developed for Humboldt and Lander Counties in Nevada which shows the tradeoffs between regional household income (wages, salaries, profits, and rents) and/or employment and water usage. Water income and water employment multipliers can be ranked, enabling decisionmakers to realize sectors which require greatest regional water usage to regional household income and/or employment.     

FINANCING FEDERAL WATER DEVELOPEMNT PROJECTS AND SHARING THE COSTS1

ABSTRACT: The Federal Government's interest and involvement in water resource development in discussed in the context of project financing and cost sharing. After drawing a clear distinction between the two issues - who puts up the money, and who repays over time - the authors survey a number of Federal acts from which have evolved nearly 200 separate cost-sharing rules. Selected cost sharing and financing issues discussed include consistency in policies, rehabilitation of urban water supply systems, multipurpose water quality projects, and ground water management. Two proposals for cost/finance sharing reform introduced in the 96th Congress are discussed in detail and their impacts compared with current policy. The joint venture approach (Administration proposal) results in an effective composite cost share which changes significantly but not drastically (from 19 to 35 percent non-Federal share for a hypothetical project). The block grant approach (Domenici-Moynihan proposal) would alter the regional distribution of Federal water developement funding from the South and West to the Northwest and North Central States.     

COST ANALYSIS OF WATER AND WASTE WATER TREATMENT PROCESSES IN DEVELOPING COUNTRIES1

ABSTRACT: Mathematical modeling techniques are used to develop predictive equations for cost of water and waste water treatment processes in developing countries utilizing socioeconomic, environmental, and technological indicators. Predictive equations are developed for each of the three regions (Africa, Asia, and Latin America) for construction, operation, and maintenance costs of slow sand filter, rapid sand filter, stabilization lagoon, aerated lagoon, activated sludge, and trickling filter. Data analysis indicated that cost of water treatment processes is a function of technological indicator (percentage of imported materials), population, and the design capacity. The variables which gave the best correlation for waste water treatment cost were population, design flow, and the percentage of imported waste water disposal materials.     

FISH AND WILDLIFE ENHANCEMENT THROUGH WATER RESOURCES DEVELOPMENT1

.Fish and wildlife enhancement through water resources development implies fish and wildlife will be enhanced or benefit directly from such development. As a matter of practicality, the opposite may be the case in that wildlife lands of prime value and stream fisheries are often lost or severely altered as a result of reservoir construction or stream channelization. Additionally, estuarine fish and wildlife can also suffer from water resources development due to reductions in volume of fresh waters reaching the estuaries and adjacent marshes. In some instances waterfowl habitat can be created by reservoir construction and with good planning waterfowl habitat and use may be enhanced. To offset losses of thousands of acres of wildlife habitat when a river system is to be totally harnessed, planners could set aside sufficiently large natural areas dedicated for use by wildlife. This, however, would be replacement rather than enhancement. Reservoir fisheries can be enhanced with good planning to include timber clearing, shoreline clearing, boat road clearing, variable level drawoff devices and tailrace escapement channels. To sum up, it is possible for some species offish and wildlife to be enhanced through water resources development but only at the expense of others, and then only through careful and integrated planning.     

WATER POLICIES FOR ENERGY DEVELOPMENT1

ABSTRACF: Examination of a series of studies of the economically efficient water allocations in the Upper Colorado River, Yellowstone River, and Great Basins indicate that water is not a serious general physical constraint on the development of energy resources, so long as public institutions do not hinder the exchange of water rights in markets. Energy development will cause limited impacts on other water-using sectors, principally agriculture. There appears to be little reason to develop large-scale water storage facilities, even during periods of reduced water production. Water storage developments appear to be necessary only when institutional constraints severely restrict water rights markets and transfers.     

ECONOMICS AND FEDERAL WATER PROJECTS1

While the science of economics is widely used in Federal water resource development projects, the usual procedure of applying an analytical discipline to arrive at a conclusion is reversed. The “answer” is usually provided ahead of time and economics is assigned the task of justifying the preconceived conclusion. This leads to a series of mitigatory effects in which economics as a science is not allowed to freely function. This article attempts to illustrate some of these “unusual” uses of economics in Federal water projects and note the “answers” we would logically expect from the economic discipline. Even though the theory of economics is often subverted, there are positive aspects to the role of economics in evaluating Federal water projects.     

MISSOURI RIVER DEVELOPMENT POLICY AND RURAL COMMUNITY DEVELOPMENT1

ABSTRACT: Federal planners, in proposing the massive main stem Missouri River water developments in Montana and North Dakota, promised economic and social benefits to the local residents. Five main stem dams, Fort Peck, Garrison, Oahe, Big Bend and Fort Randall, were evaluated for community and rural development effectiveness. Thirty-seven development factors were examined and improvements noted. Only small differences were noted between areas with water developments and the control area. Further analysis revealed that water development benefits moved downstream and to existing urban areas. The Missouri River's rural areas and small communities were not developed significantly by the water projects. Several problems associated with water development policy were illustrated by the study. Cultural differences between planners and the population impacted were ignored. Second, the allocation of social costs was not considered and related to this, serious geographic maldistribution of benefits and costs resulted. The differences between pre-development promises and development performance was dramatic. While the large dams remain as landmarks to engineering prowess, the projects need to be evaluated for their success in meeting humanistic development objectives. Major redevelopment may be warranted by such an ex-post evaluation.     

A WATER RESOURCE PLANNING PROCEDURE FOR RURAL TOWNS1

ABSTRACT: Six new techniques have been developed for lake watershed analysis and water resource management. The techniques are for determining: (1) watershed land use intensity with reference to water quality, (2) lake vulnerability, (3) water quality, (4) watershed carrying capacity, (5) the economic value of the lake, and (6) the potential of undeveloped lake-shore. These analyses are designed for use by rural planning commissions with guidance and assistance from state agencies and the state university. The comprehensive rural watershed land and water use plan developed by this procedure is inexpensive in time and money, understandable by the layman, and scientificially sound. It is based on presently available information. This water resource planning procedure has been demonstrated in several town planning projects. It is suggested that this method, or modification of it, could be adopted in all rural states by action by a few administrators and without any new enabling or appropriations legislation.     

COST BEHAVIOR AND WATER SYSTEMS1

ABSTRACT: Several factors theoretically affect the cost behavior of water systems. These factors include scale, consumer density, and per capita usage. This analysis examines the several possible influences on the unit costs of water service. The statistical analyses indicate that among the factors of scale, per capita use, and consumer density, only the first two factors are important influences on water system costs. Water consumers appear to benefit from being served by large systems and being located in service areas characterized by relatively high per capita consumption. There is little statistical evidence indicating that more dense areas can be provided water service at lower costs than less dense areas.     

A DYNAMIC MODEL FOR WATER AND RELATED LAND RESOURCE PLANNING1

ABSTRACT. Planning an optimal system of activities for generating economic goods and services within an existing natural resource capacity is a difficult problem to solve. A mathematical programming model with the capacity to check multiple resource demand and supply compatibility over many time periods was developed for the solution to this type of problem. The characteristics of natural resource supply and the demand of activities were utilized to reduce the number of time periods and to minimize the loss of the dynamic reality of the problem. Reduction in the number of time periods extended the capability of the model to the solution of complex resource planning problems without oversimplification.