Integrated Hydrologic-Agronomic-Economic Model for River Basin Management

The interdisciplinary nature of water resources problems requires the integration of technical, economic, environmental, social, and legal aspects into a coherent analytical framework. This paper presents the development of a new integrated hydrologicagronomic-economic model in the context of a river basin in which irrigation is the dominant water use and irrigation-induced salinity presents a major environmental problem. The model’s main advantage is its ability to reflect the interrelationships between essential hydrologic, agronomic, and economic components and to explore both economic and environmental consequences of various policy choices. All model components are incorporated into a single consistent model, which is solved in its entirety by a simple but effective decomposition approach. The model is applied to a case study of water management in the Syr Darya River basin in Central Asia. DOI: 10.1061/~ASCE!0733-9496~2003!129:1~4! CE Database keywords: Water resources management; River basins; Irrigation; Optimization; Economic analysis. Integrated Hydrologic-Agronomic-Economic Modeling The interdisciplinary nature of water resources problems requires the integration of technical, economic, environmental, social, and legal aspects into a coherent analytical framework ~Serageldin 1995!. A river basin is a natural unit for integrated water resources planning and management, since water interacts with and to a large degree controls the extent of other natural components such as soil, vegetation, and wildlife. Human activities, too, so dependent on water availability, might best be organized and coordinated within the river basin unit. Water resources management needs to focus on an integrated basin system, including water supply, water demand, and intermediate components. Accordingly, policy instruments designed to make more rational economic use of water resources are likely to be applied at this level. To provide an analytical framework at the basin scale, modeling techniques for integrated models have been studied and found to present opportunities for the advance of water resources management ~McKinney et al. 1999!. Irrigation is the dominant water use in many arid and semiarid river basins, and irrigation management plays a critical role in water management in these basins. An integrated hydrologicagronomic-economic model combines the management of surface Research Fellow/Researcher, International Food Policy Research Institute/International Water Management Institute, 2033 K St., Washington, DC 20006. Associate Professor, Dept. of Civil Engineering, Univ. of Texas, Austin, TX 78712. Professor, Dept. of Management Science and Information Systems, Univ. of Texas, Austin, TX 78712. Note. Discussion open until June 1, 2003. Separate discussions must be submitted for individual papers. To extend the closing date by one month, a written request must be filed with the ASCE Managing Editor. The manuscript for this paper was submitted for review and possible publication on May 9, 2000; approved on October 26, 2001. This paper is part of the Journal of Water Resources Planning and Management, Vol. 129, No. 1, January 1, 2003. ©ASCE, ISSN 0733-9496/2003/14–17/$18.00. 4 / JOURNAL OF WATER RESOURCES PLANNING AND MANAGEMENT and subsurface reservoir ~supply! systems with irrigation and farming, evaluates irrigated crop yields, and derives reservoir operating policies. Some recent studies of such systems include Vedula and Mujumdar ~1992!, Dudley and Scott ~1993!, and Vedula and Kumar ~1996!, in which reservoir release and fieldwater allocation decisions are integrated in a modeling framework, taking into account soil moisture dynamics and crop growth at the field level. Reservoir inflow and precipitation can be considered stochastic, and water allocation among multiple crops is included ~Vedula and Kumar 1997!. Models in all these studies are applied to a single farm and a single reservoir, and result analysis is limited to reservoir operation and irrigation scheduling. Moreover, due to increasing water scarcity and worsening water quality, irrigation planning should take both irrigation purposes and water quality control into account. Models integrating irrigation water application and salinity control have been extensively studied since the 1970s @for example, Yaron et al. ~1980!; Bras and Seo ~1987!; Musharrafieh et al. ~1995!#. Important economic issues in integrated economic-hydrologic river basin modeling include transaction costs, agricultural productivity effects of allocation mechanisms, intersectoral water allocation, environmental impacts of allocations, and property rights in water for different allocation mechanisms ~Rosegrant and Meinzen-Dick 1996!. A notable effort in integrating economic and hydrologic modeling into a multibasin conjunctive use model was reported by Noel and Howitt ~1982!. A number of auxiliary economic and hydrologic models were used to derive sets of linear first-order difference equations. These were incorporated into a linear-quadratic control model that was used to determine the optimal spatial and temporal allocation of a complex water resource system and to examine the relative performance of various policies ~social optimum, pumping tax, and laissez-faire!. Lefkoff and Gorelick ~1990b! combined distributed parameter simulations of stream-aquifer interactions, salinity changes, and agronomic functions into a long-term optimization model to determine annual groundwater pumping, surface-water applications, and planting acreage. This model was further extended to incor/ JANUARY/FEBRUARY 2003 porate a rental market mechanism ~Lefkoff and Gorelick 1990a! considering annual water trading among farmers. Instead of fixed-quantity proposals ~prescribed water-use rights!, endogenous demand functions for individual demand sites have been included in the integrated hydrologic-economic models. Booker and Young ~1994! provided a remarkable example using this type of analysis. Their model includes complex relationships on both water supply and demand sides. For supply, flow and salt balances were written for a river basin network ~the Colorado River!; on the demand side, marginal benefit functions were defined for offstream uses ~irrigation, municipal, and thermal energy! and instream uses ~hydropower and water quality!. The model was used to estimate impacts of alternative institutional scenarios, river flows, and demand levels. In terms of model formulation and solution approaches, integrated hydrologic-economic models can be classified into models with a compartment modeling approach and models with a holistic approach ~Braat and Lierop 1987!. Under the compartment approach there is a loose connection between the economic and hydrologic components, and only output data is usually transferred between the components @for example, Lefkoff and Gorelick ~1990a,b!#. Under the holistic approach, there is one single unit with both components embedded in a consistent model. Information transfer between hydrologic, agronomic, and economic components remains a technical obstacle in ‘‘compartment modeling,’’ while in ‘‘holistic modeling,’’ information transfer is conducted endogenously. However, the hydrologic side is often considerably simplified due to model-solving complexities @for example, Booker and Young ~1994!#. Under the compartment modeling approach, combined simulation and optimization techniques can be used, while under the holistic approach, the model must be solved in its entirety. Stochastic dynamic programming ~SDP! has often been used to solve those complex holistic models @for example, Vedula and Mujumdar ~1992!; Dudley and Scott ~1993!#. However, SDP is often computationally impractical due to dimensionality problems. Other solution approaches include linear programming ~Booker and Young 1994!, and quadratic programming ~Bras and Seo 1987!. This paper extends integration of the management of a water supply system and irrigation farming system to a spatially much larger and more complex system than previous studies, such as Vedula and Mujumdar ~1992! and Dudley and Scott ~1993!. The model is developed based on a river basin network, including multiple-source nodes ~reservoirs, aquifers, river reaches, etc.! and multiple demand sites, with a number of crops considered in each demand site. This paper also extends the connections between hydrologic, agronomic, and economic modeling components, which have not been presented in detail before. In order to model water allocation mechanisms and policies, agroclimatic variability, and multiple water uses and users, we consistently account for a large number of physical, economic, and behavioral relationships. Our modeling framework includes the following components: ~1! flow and pollutant ~salt! transport and balance in the river basin network, including the crop root zone; ~2! irrigation and drainage processes; ~3! crop production functions, including effects of both water stress and soil salinity; ~4! benefit functions for both instream-water and offstream uses, accounting for economic incentives for salinity control and water conservation; ~5! tax and subsidy systems to induce efficient water allocation, improvement of irrigation-related capacities, and protection of the environment; ~6! infrastructure improvement with consideration JOURNAL OF WATER RESOURC of investment; and ~7! institutional rules and policies that govern water allocation. All these components are integrated into a consistent system whose core is a multiperiod network model of the river basin, ranging from crop root zones to the river system, whose objective is to maximize total water use benefit from irrigation, hydropower generation, and ecological water use. The model, which is large and contains many nonlinearities, is solved by a decomposition approach. It is applied to water management analysis of the Syr Darya River in the Aral Sea basin of Central Asia.