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.     

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.,     

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.     

ADAPTATION TO ARIDITY: WATER DEVELOPMENT IN SOUTH AFRICA1

ABSTRACT The Republic of South Africa, legatee of a three-century history of recurring drought, is firmly committed to a program of the optimum use of its water for the national benefit. Its water law encourages centralized planning in that water is held to be the property of the state and is assignable without requiring acquiescence by the basin or province of origin. Interbasin diversions from the Tugela River to the Vaal River Basin, from the Orange River to the Fish and Sundays River Basins, and from several basins to Cape Town are under construction as are facilities for water importation from Lesotho and Angola. For satisfaction of demands beyond the year 2000 the nation may depend increasingly on a shift of its power production and water-using industry from the coal fields of the central plateau to nuclear power development with associated desalination along its coasts. Alternatively, and preferably, it may cooperate in a co-prosperity bloc in Southern Africa aiding the economies of its neighbors by development for mutual advantage of the water and power resources of the Okavango and other northern rivers.     

THE DEVELOPMENT OF A MODEL TO EVALUATE HYDROLOGIC RISK IN WATER RESOURCE SYSTEM DESIGN1

In this paper, a procedure for analyzing a water resource system with special emphasis on evaluation of acceptable economic risk due to occasional failures to deliver water is proposed. The basic methodology includes the development of a simple mathematical model which describes the physical hydrologic and economic characteristics of a single reservoir irrigation and city water supply system and an evaluation of economic benefits of the system with full and partial deliveries of water. The system is simulated for various combinations of decision variables (system magnitudes) and an optimum design is obtained by response surface technology. Emphasis is placed on the basic model and methodology although, in order to introduce some realism, the procedure is applied to data based on the existing reservoir system on the South Concho River in West Central Texas.     

INPUT-OUTPUT AND BENEFIT-COST ANALYSIS FOR WATER RESOURCE DEVELOPMENT PROJECTS1

ABSTRACT: The proper use of input-output for estimating regional benefits and costs is described for instances where project outputs go to final or intermediate demand. How that estimation is affected by the method used to value the primary project benefits and by the sector content of the input-output model compared to the primary sector affected are discussed as are points of terminological confusion between the two methods.     

PRICING IRRIGATION WATER IN DEVELOPING COUNTRIES1

ABSTRACT Alternative combinations of water pricing and regulations are possible in allocating irrigation water. The best combination will depend on the value of water, ability to control deliveries, desire to subsidize agriculture, ownership traditions, crops grown, return flows, drainage problems, staff training, ability to collect fees, the number of farmers involved, etc. Marginal cost pricing is just one possible alternative and it is more a way of thinking about prices rather than a set system. The possibilities for achieving an equitable and efficient distribution of water are improved if some form of marginal cost pricing is included in the system of water charges.     

ECONOMIC FORECASTING FOR VIRGINIA'S WATER RESOURCE PROGRAMS1

ABSTRACT: Water resource and water quality management planning depend, to a large degree, on forecasts of industrial activity and population projections. A flexible economic data base is especially important where planning follows varying formats of geographical and industrial detail. Records of employment and payroll are collected in the administration of Unemployment Insurance (U.I.) programs and are available from State Employment Agencies. These statistics have been collected over a long period of record (thirty-five years). Many years of record are available on punched-cards or magnetic tape and may be arrayed and manipulated by computer. This basic approach has been followed in Virginia. Historical U.I. payroll and employment records for the period 1956 through 1970 were procured on magnetic tape. This data was arrayed by major hydrologic area and by regional planning district. Projections of manufacturing activity were then generated by fitting several exponential equations to annual payroll data in two-digit Standard Industrial Classifications. These exponentials were then extrapolated to provide a range of industrial projections. Other parameters of manufacturing activity were then correlated to the payroll data to generate projections of indexes such as employment, value-added, and gross manufacturing output. U.I. payroll data is now being correlated to parameters in non-manufacturing categories. Projections for industries such as trade and services will link extrapolated payroll data with benchmark correlations of payroll and sales receipts.     

WATER CONSTRAINTS ON ENERGY DEVELOPMENT: A FRAMEWORK FOR ANALYSIS1

ABSTRACT: The pressure on water resources from energy resource development and transformation is likely to be greater in the future than it has been in the past. A rational resolution of the political problems that this situation will generate requires that: 1) planning based on predictions of future energy supply and demand be replaced by scenario, or “what if?” analysis; 2) full attention be paid to the uncertainties in per-unit-energy water requirements; 3) suitable stochastic measures of water availability be used to compare water supply with water demand; 4) realistic ecological criteria, and other alternative use criteria, be developed for estimating impacts of water withdrawn or consurned for energy development; 5) human consequences of ecological impaccts are described in a manner that will allow the political process to intervene in an optimum manner to allocate water resources.     

SOCIO-ECONOMIC ACCOUNTING APPLIED TO WATER RESOURCE PLANNING1

ABSTRACT The growing social consciousness and concern with human well-being has resulted in numerous water resource use and control programs, the results of which must be measured not in the customary monetary terms, but rather in terms of social and human welfare. Interdisciplinary research offers the greatest promise of yielding fruitful results in establishing planning methodology that would result in a maximum utilization of funds available for water resource programs. Working with the various social science disciplines, accountants have begun research in social measurement thus opening the door to a new field of accountancy known as socio-economic accounting. The development of social accounting systems will improve water resource management by projecting heretofore unmeasureable social values into the management decision making process.     

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.     

A METHOD FOR INCORPORATING AGRICULTURAL RISK INTO A WATER RESOURCE SYSTEM PLANNING MODEL1

ABSTRACT Prior studies of water resource systems have considered risk from the point of view that only the system planners could react to the effects of the risk elements. However, users of water from a system also react to risk. When the quantity of water that a system can supply is subject to considerable variation, the reactions of the users of the water will often effect the benefits generated by the system and thus its optimal design characteristics. A simulation model of a reservoir-irrigation system is developed which incorporates the water users' reactions to risk in such a manner as to reflect their influence on the optimal design characteristics. A risk (convex) programming algorithm is incorporated into the model to reflect the water users' reactions to various levels of aversion to risk and degree of uncertainty in water deliveries. Response surfaces are generated as a result of performing the simulation at different levels of the design variables. An examination of these surfaces reveals the importance of including water users' reactions to risk in water resource system planning. The effects of different levels of risk aversion on the irrigation farmers' choice of crop enterprises are also examined.     

RESOURCE DEMANDS FOR ENERGY DEVELOPMENT IN THE YELLOWSTONE RIVER BASIN1

ABSTRACT: This paper reports on the development of a mathematical model for forecasting energy development in the Yellowstone study area for the years 1985 and 2000, and determining the associated economic demands for water, land, labor, capital, and mineral resources. The study was prepared for use by the Missouri River Basin Commission in conducting a comprehensive, “Level B” planning study of the water and related land resources in the Yellowstone River Basin. The study results indicate that the amount of coal development in the Yellowstone study area will depend primarily upon state and federal energy policies and regulations. Policies related to slurry pipeline transportation of coal will be particularly important in determining the level and pattern of future energy development in the area. Coal production under the “most probable” scenario is expected to increase from about 40 million tons in 1976 to 163 million tons per year by 1985, and 513 million tons in the year 2000. Consumptive water use for energy development in the study area could be as much as 556,000 acre-feet per year by the year 2000 (under the high scenario). A parametric analysis was conducted on the 1985 most probably scenario to determine the influence on the study results of variations in the delivered price of water. Water requirements were reduced by nearly one-fourth as water costs increased from zero to over $750 per acre-foot.     

WATER SUPPLY AND URBAN GROWTH PLANNING: A PARTNERSHIP1

ABSTRACT As urban expansion outstrips water supplies, the usual solution is to build pipelines to bring in water from sources farther afield. Such water supplies may act as either a leader of urban development or as a follower. In either case, this engineering approach to the provision of water has fostered less than optimal utilization of regional water and land resources for urban growth. More efficient utilization of these resources is achieved when water supply development and urban growth planning are conjoint activities. Water supply planners and land use planners, working together, are able to generate and evaluate the full range of urban development options, including water demand management through conservation. Preferred regional growth plans are achieved using the best mix of water supply and urban growth. The result is a reduced rate of water supply development and a reduction of urban expansion on prime lands. This partnership approach is demonstrated for the Calgary Region under two levels of water conservation.     

EMPHASIS ON DISTRIBUTION: STRATEGIES FOR SMALL SCALE WATER RESOURCES DEVELOPMENT IN THAILAND1

This paper discusses strategies for the development of water resources, emphasizing the delivery of reliable water supplies, for both domestic and production purposes, to every village and to every farmer. This necessitates a shift of emphasis from the construction of large storage reservoirs to the construction, operation, and maintenance of water distribution systems capable of reaching the largest number of farms, and a shift from projects that benefit the few, to projects that benefit the many. Water distribution in this context takes on three interrelated meanings: a geographical meaning, a technical meaning, and an economic meaning. The geographical meaning focuses on the spatial distribution of the recipient population as a key to identifying the proper distribution of water projects in physical space. The technical meaning relates to the physical distribution of water through canal systems to the farmers' fields. The economic meaning refers to the equitable distribution of benefits from water projects. The paper provides an illustration of the need for an emphasis on distribution, using the state of development of water resources in northeast Thailand as an example, with a proposed program for the further development of these resources. The northeast, the poorest region in the country, has been recognized by the Government of Thailand as a priority area for accelerated regional development efforts.     

CAN STATE AND LOCAL GOVERNMENTS ASSUME MORE OF THE COSTS OF WATER DEVELOPMENT?1

ABSTRACT As availability of funds in the federal budget for water development has decreased recently, pressure has increased for state and local governments to pay a larger share of the costs. In this situation a difficult question immediately arises-what is the capability of state and local governments to pay a larger share? Of course, there is no easy answer. Expenditures of public funds are policy outcomes of a government's political process in which political, economic, legal and other factors are involved in complex relationships. The traditional sources of capital funds for state and local governments include bond proceeds, tax revenues, and federal financial aid (state aid is also a major source of local government funds). The issuing of bonds is hampered by a variety of legal debt limitations, but there are means for circumventing the limitations. State and local governments vary widely in amounts of taxable resources available and in the extent to which these resources have been tapped. More effective use of revenue resources could be made in some cases. New sources of capital funds for water development ought to be considered-a fee on the use of water per se, for example. Costs associated with water use currently are imposed to cover development costs, but a state might impose additional use fees earmarked for a state water development fund.     

AN APPLICATION OF MATHEMATICAL PROGRAMMING TO WATER RESOURCES PLANNING: AN ECONOMIC VIEW1

ABSTRACT: Individuals involved in state water resource planning generally have avoided any development of a comprehensive public water planning investment model that would set the stage for quantitative recommendations of a “what ought to be” tone for future water strategies. Three New Hampshire towns were selected to illustrate the usefulness of a mixed integer multiperiod programming model that utilizes hydrologic and economic data for identifying the discounted least cost of water supply, distribution, and scheduling. Comparisons are made regarding the feasibility of a regional water system approach versus independent “town by town” water supplies that presently prevail. To analyze the sensitivity of optimal water planning solutions to projected water demands, variations in these demands are made.     

COMPETING WATER USES IN THE SOUTHWESTERN UNITED STATES: VALUING DROUGHT DAMAGES1

ABSTRACT: Economic benefit functions of water resource use are estimated for all major offstream and instream uses of Colorado River water. Specific benefit estimates are developed for numerous agricultural regions, for municipal uses, and for cooling water in thermal energy generation. Economic benefits of hydropower generation are given, as are those for recreation on Colorado River reservoirs and on one free-flowing reach. Marginal and total benefit estimates for Colorado River water use are provided. The estimates presented here represent a synthesis of previous work, providing in total a comprehensive set of economic demand functions for competing uses of Colorado River water. Non-use values (e.g., benefits of preserving endangered species) are not estimated.     

MANY RESOURCES,MANY USES: A SYSTEM ANALYSIS APPROACH TO RENEWABLE RESOURCE DEVELOPMENT1

ABSTRACT: Decisionmaking associated with the Nation's 1.7 billion acres of forest and range land has become increasingly complicated because of the rise in competition for resource use and in the awareness of environmental and social effects. This system analysis approach uses four models to synthesize pertinent masses of information into measures of economic, environmental, and social impacts. The system results can be used to help evaluate alternative national programs. The models are:

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