COST SHARING AND IMPLEMENTATION OF NATIONAL WATER RESOURCES POLICY1

ABSTRACT: In this article a managerial approach to developing and implementing National Water Resources policy is suggested. Proper consideration can be given to national economic development (NED), environmental quality (EQ) and conservation and still result in an implementable policy at the operational level if proper incentives are built into the process with proper attention to alternate non-Federal cost sharing rates. Not only can these multiple objectives be entertained but the Administration and Congress will have a management tool that should ensure a certain probability of success.     

A DESCRIPTIVE MODEL FOR ANALYZING PROPOSED COST SHARING RATE CHANGES1

ABSTRACT: This article offers a procedure for identifying the primary effects of financing and cost sharing rates on four basic levels: program, technical, incidence, and comprehensive impacts. A process is developed for identifying these effects based upon two alternative approaches. One method would follow the effects of rate changes through the four levels of impact, another would look in depth at the consequences of rate changes on a particular impact. For this study the information and suggested changes found in the Section 80(c) Study were used to illustrate possible impacts. The process suggested herein could be used in anticipating impacts of any major policy change.     

COST SHARING IN TRANSITION: THE CASE OF PLAN 6, CENTRAL ARIZONA PROJECT1

ABSTRACT: In the past, development of Federal water resource projects depended heavily or exclusively on Federal financing of construction costs. However, pressures on the Federal budget, environmental issues, and the notion that there are economic efficiency gains when beneficiaries of Federal water resource projects increase their cost share are causing changes. The case of the Central Arizona Project Plan 6 is a noteworthy example of the transition to more non-Federal participation in water resource development. This is because the non-Federal financing is to be provided for a project already under construction. The negotiation and terms of the Plan 6 financing agreement between the Department of the Interior and multiple interests in Arizona are used as an example of how Federal water project cost sharing is in a state of transition. The negotiation process is described, a financial analysis is provided, and the terms of the agreement and policy issues that were deliberated in the Executive Branch of the Federal Government are discussed.     

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.     

LINEAR PROGRAMMING USE FOR EVALUATING WATER RESOURCES AND COST AND BENEFIT ALLOCATION1

ABSTRACT A linear programming model for a river basin was developed to include almost all water-related economic activity both for consumers and producers. The model was so designated that the entire basin or basin sub-division could be analyzed. The model included seven sectors, nine objective function criteria, and three river-flow levels. Economic basis for conflicts among sectors over incidence of cost allocation and level of economic activity can be traced to some chosen objective. The disposal of untreated household waste water, particularly from the rural household, directly into the river was consistent with maximizing net benefits and minimizing costs. The optimum resource allocation, water-treatment plants, farms and industry activities would change with flow level. For each of the three industries analyzed separately, paper, wool and tanning, public treatment of industrial waste water was the optimal treatment process in one or more of the solutions. Lake shoreline was the dominant feature determining lake-resource valuation. Implied capital value varied from $126 per shoreline foot to over $250 depending on discount rate. Implied prices on lake surface ranged from $42 to $147 per acre. Strong economic forces encouraged small lot sizes for vacation cottages.     

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.     

ALLOCATION MODEL FOR IRRIGATION WATER COST: CASE STUDY OF THE NILE VALLEY IN EGYPT1

ABSTRACT: An allocation model for irrigation water cost, based on the Use of Facilities method, is presented. The model is developed for large-scale irrigation systems which may include multipurpose reservoirs, irrigation control works, pump stations and irrigation canals of various orders. The model accounts for the water conveyance losses as well as the water gains in the irrigation canals, and their effects on irrigation cost. It is applied to the irrigation distribution system of the Nile Valley in Egypt, which contains the High Aswan Dam, 16 irrigation structures, 12 pump stations, and numerous irrigation canals. The irrigation water cost at 29 areas representing the Nile Valley is determined.     

THEORY AND REALITY IN ALLOCATING FEDERAL RESOURCES TO WATER RESOURCES DEVELOPMENT1

ABSTRACT: Federal spending on water resource development projects exceeds $10 billion annually. This paper examines the economic theory and practice on which the Federal water resource development plans are based. Existing theoretical and applied problems result in overinvestment. These include 1) no standard of value for the tradeoff of environmental objectives with economic objectives; 2) benefits based on “willingness to pay,” but beneficiaries pay only a fraction of a project's costs; 3) beneficiaries “shop around” among program purposes in order to reduce their commitments; and 4) benefit/cost (B/C) analyses are based on a discount rate, which is consistently below the Federal borrowing rate. Furthermore, the Government Accounting Office (GAO) frequently finds that the agency regulations are inadequate and result in inconsistent and questionable benefit computations. The President has proposed a series of water policy reforms, to reduce some of the apparent overinvestment in water resource development, but fundmental corrective action rests with the members of Congress.     

ROLE OF IRRIGATION WATER IN AGRICULTURAL PRODUCTION: SOME RESOURCE USE ISSUES1

ABSTRACT: A partial production function for corn that considers the time and amount of water applications is determined. Examples are worked out by using data on site specific parameters for nine soil sites in the Great Plains Region repesenting various combinations of water holding capacity, pan evaporation, and average rainfall. It is found that soils with a low water holding capacity are more water and energy intensive in crop production and thus more vulnerable to fluctuations in net returns due to declining water tables or energy shortages. Despite this, farmers of low water holding capacity soils are likely to opt for irrigation. This points to the existence of a necessary, but sufficient, condition for socially inefficient use of ground water resources. This calls to question the property right concept in water created through the appropriation doctrine and the “law of capture.” This paper indicates the type of analysis that must be undertaken in order to make appropriate changes in laws governing water use.     

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.     

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.     

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.     

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.     

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.     

BUILDING THE AGENDA FOR INSTITUTIONAL RESEARCH IN WATER RESOURCE MANAGEMENT1

ABSTRACT: This paper pursues more specifically the recommendations of a recent National Research Council report recommending greater attention to research on institutions in the field of water resource management. The important challenge for the future in institutional research lies in going beyond the observation that institutions are important and in explaining instead how institutions actually affect management options and outcomes. It is possible to illuminate the relationships between institutional features and water management through comparative institutional research. This paper offers recommendations for studying water institutions in a comparative context, including methodological recommendations concerning approaches to comparative institutional research, and topics for comparative institutional research that appear especially fruitful at this time. The example of conjunctive management is used to illustrate the importance of institutional factors in water management, drawing to some extent on the authors’ recent experience with a comparative study of conjunctive management institutions.     

SIMULATION – A TOOL FOR WATER RESOURCE MANAGEMENT1

ABSTRACT: Proper economic evaluation of alternative plans will maximize the utility achieved from the resources available for water resource management. A knowledge of the frequency of occurrence of the events under study is necessary to fully utilize the advantages of economic evaluation in planning. Frequency information is widely used in flood control and water supply, but relatively unknown in water quality planning. A continuous, dynamic hydrologic and water quality model is presented to develop frequency curves for various water quality criteria. Results from the Denver Regional Water Quality Management Study are discussed as an example of the use of frequency analysis for economic evaluation of water quality management.     

A NET BENEFIT MODEL FOR RECREATION PLANNING AT DRINKING WATER RESERVOIRS1

A management model was developed for determining levels of recreation activities at public drinking water reservoirs. Quabbin Reservoir, located in central Massachusetts, served as a case study for the model. An interdisciplinary research team was formed to study the impact of selected recreation activities on water quality, public demand and willingness to pay for selected recreation activities, carrying capacity constraints, and the economic cost/benefits associated with increases in recreation at the Quabbin Reservation. Study variables were integrated into a quadratic programming model, producing the number of participants that corresponds to maximum net benefits for specific development packages on design days. The recreation mix associated with maximum net economic benefits was found to be cost-effective (assuming the use of reasonable entrance fees) and not deleterious to water quality. However, as a result of the findings of a related study, it was recommended that nutrients, particularly from wastewater, not be permitted to enter the reservoir, since the current phosphorous level may be at a critical point. Management techniques that would safeguard against this occurrence were recommended. The model was sensitive to management objectives; recommendations were limited to activities that would not lower the existing high quality of Quabbin water.     

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.     

ENHANCING THE EFFECTIVENESS OF PUBLIC PARTICIPATION IN DEFINING WATER RESOURCE POLICY1

ABSTRACT: Federal regulations require agencies administering water resource projects to inform and educate citizens so that they will understand and participate effectively in local programs. Government officials and public involvement specialists have proposed positive outcomes which should derive from agency educational efforts. Eleven interdependent educational goals are identified in this study such that achievement of each goal improves the likelihood of achieving others. Evaluations indicate that educational programs are inadequate and goals are not attained fully. The incorporation of mechanisms employed by professional educators is a potential remedy. Educational and social psychology contain an abundance of effective educational devices and methodologies appropriate for use in informal adult educational programs. An individualized educational program is recommended to meet the needs of a heterogeneous adult audience.     

EVALUATING INTERDEPENDENT WATERSHED CONSERVATION AND GROUND WATER MANAGEMENT REFORMS1

Abstract: Conserving the watershed can help to preserve ground water recharge. Preventing overuse of available water through pricing reforms can also substantially increase the value of an aquifer. Inasmuch as users are accustomed to low prices, efficiency pricing may be politically infeasible, and watershed conservation may be considered as an alternative. We estimate and compare welfare gains from pricing reform and watershed conservation for a water management district in Oahu that obtains its water supply from the Pearl Harbor aquifer. We find that pricing reform is welfare superior to watershed conservation unless the latter is able to prevent very large recharge losses. Watershed conservation that yields net gains in combination with pricing reform may cause net losses without the pricing reform. If adoption of watershed conservation delays the implementation of pricing reform, the benefits of the latter are significantly reduced.