Recipient Organization
UNIVERSITY OF GEORGIA
200 D.W. BROOKS DR
ATHENS,GA 30602-5016
Performing Department
AGRI & APPLIED ECONOMICS
Non Technical Summary
Water is an essential input to both agricultural production and a healthy state economy. Water quality has become a vital concern for both agricultural profitability and for the quality of life in rural and urban areas. Research is required to better understand the costs and benefits of alternative strategies to manage water, and to integrate the quality and quantity dimensions of water policy and economics. This project develops quantitative and institutional inforamtion about the integrated management of water quality and water quantity.
Animal Health Component
65%
Research Effort Categories
Basic
35%
Applied
65%
Developmental
(N/A)
Goals / Objectives
Over the past decade, it has been recognized that the challenge for improving water quality has turned from point sources to nonpoint sources. Agriculture has come under particular scrutiny in this regard. To date, both EPA and the states have found very limited regulatory authority to force farmers to take particular actions. Programs have focused on positive incentives, cost sharing, and the provision of information. Limited authority for regulatory measures in agriculture and a variety of other nonpoint sources exists under the CWA and the Coastal Zone Management Act, as well as the Safe Drinking Water Act USEPA and Georgia EPD are under court order to develop TMDLs under tight time deadlines. This will be done in circumstances of significant uncertainty in all of the important technical relationships in the regulatory process: the effect of specific practices on the timing and nature of pollutants; the effect of individual pollutants on ambient levels of sediment,
nutrients, etc.; the effect of different levels of ambient concentrations on water quality and the integrity of aquatic ecosystems; the way multiple stresses combine to influence water quality and the integrity of aquatic ecosystems; and the cost of alternative management practices that affect pollutant loads. Designing efficient, adaptive policies under this wide range of uncertainty is a particular challenge requiring careful attention to the principles of flexible regulation and decision-making under uncertainty. However, forming these policies during a time of what will very likely be fundamental change in the way that surface water and groundwater are allocated and used. The objective of this project is to combine economic models with models of agricultural, hydrological, and ecological processes to assess management strategies and enhance knowledge about water quality and water allocation in Georgia. The more specific sub-objectives are: 1. to use water quality, hydrology, and
economic models to examine the relative cost-effectiveness of flow augmentation (quantity) and management practices (traditional water quality measures) in meeting TMDLs in agricultural areas of Georgia. Currently, TMDL implementation strategies are formulated exclusively with regard to measures that reduce pollutants from both point and non-point sources. 2. to use models of economic behavior, management practices, hydrology and the economics of water use in poultry, residential development and traditional point sources to determine how to implement cost-effective controls (in particular alternative designs for trading programs) to meet water quality standards in the Etowah / Lake Allatoona watershed. 3. to use data on geology, fluid dynamics and water use to estimate the responsiveness of agricultural water use to changes in pumping cost. This is the best (and only) proxy for examining how use responds to price.
Project Methods
The hypotheses and methods refer to the specific sub-objectives from the 'Objectives' section: 1. It is my hypothesis that water quality standards in agricultural areas of Georgia can be cost-effectively met by a combination of nutrient-reducing technologies and flow augmentation. I plan to use a spreadsheet-based adaptation of the Streeter-Phelps dissolved oxygen deficit equation with modifications to account for the oxygen demand resulting from nitrification of ammonia and oxygen demand found in water body sediment. I will then use estimates of the costs of management practices and flow augmentation from the economic literature and from in-state informants to estimate the relative costs of different strategies. I expect to find that dissolved oxygen standards can be met at lower cost through if there is some reliance on flow augmentation, although how significant a shift toward flow augmentation will be cost-effective is difficult to predict in advance. 2. It is my
hypothesis that a) opportunities for cost-effective phosphorus (P) reductions through trading exist in the Lake Allatoona (Georgia) watershed, and b) in order to exploit these opportunities, it is necessary to specifically account for uncertainty in cost, control effectiveness, and location-specific damages. The methods used to test these two hypotheses involve collaboration with a group of my UGA colleagues in the hydrological and agricultural sciences. We will inventory all potential sources of P, including POTWs, poultry operations, and other livestock operations. We will then use a combination of estimates from the literature and cost modeling to estimate reduction costs for each source based on available technologies The end result of combining economic models with SWAT will be the ability to pinpoint trading opportunities. We will then subject these opportunities to see how attractive they remain at varied trading ratios that reflect uncertainty and differential damage. 3. It is
my hypothesis that pricing water is an important tool in affecting crop choice and irrigation behavior. The methodology for testing these hypotheses involves developing data from Agricultural Water: Potential Use and Management Program in Georgia, conducted by the University of Georgia's Nationally Environmentally Sound Production Agriculture Laboratory. I will use the data on well depth and pump technology to develop estimates of the marginal cost, in terms of fuel, of delivering water to irrigated acreage. Fuel quantities will be converted to financial flows using appropriate temporal and geographical price data. I will also develop meteorological and agronomic information for our southwest Georgia sample to be able to include other important determinants of water demand in out analysis. I expect to use the resulting model to determine how the price of delivering water affects both the choice of crops and the extent of water use. This will be a valuable input to the debate on how
proposed reforms to water rights and exchange institutions in Georgia will affect crop choice, incomes, and water use in the state's agriculture.