MANAGEMENT AND POLICY CHALLENGES IN A WATER-SCARCE WORLD

• Sponsoring Institution: National Institute of Food and Agriculture
• Project Status: COMPLETE
• Funding Source: HATCH
• Reporting Frequency: Annual
• Accession No.: 1022055
• Multistate No.: W-4190
• Project Start Date: Jan 27, 2020
• Project End Date: Sep 30, 2024
• Program Code: [(N/A)]- (N/A)

Recipient Organization
UNIVERSITY OF WYOMING
1000 E UNIVERSITY AVE DEPARTMENT 3434
LARAMIE,WY 82071-2000

Performing Department
Agricultural And Applied Economics

Non Technical Summary
Urban growth in areas across the United States and rising demand for environmental goods and services place increased pressure on limited water resources. Much of the U.S. has experienced higher temperatures, increased variability in precipitation, and prolonged droughts in recent decades, and climate models forecast these trends to continue into the future (Wuebbles et al. 2017). Annual trends toward earlier spring melt and reduced snowpack in the western U.S. and depletion of major aquifers increase water management challenges.New approaches are needed to resolve water management challenges facing the U.S. The goal of these new approaches should be to efficiently use available water, and to minimize damage to human communities and the ecosystems on which they depend from flood, drought, and impaired water quality. General strategies to achieve these goals are to increase conservation and reallocate water more efficiently among competing uses, by using technologies and creating institutions that encourage efficient water use. These strategies require improved understanding of the complex relationships between water resource and human systems, how individuals and groups of individuals evaluate trade-offs and respond to incentives, and assessment of the physical and economic impacts associated with alternative technologies and institutions.The research and outreach/engagement activities proposed in this project seek to help decision-makers (whether federal/state policymakers or individual farm managers) understand the likely outcomes (both economic and in terms of water availability) of their actions under different climate futures.

Animal Health Component

100%

Research Effort Categories

Basic

(N/A)

Applied

100%

Developmental

(N/A)

Classification

Knowledge Area (KA)	Subject of Investigation (SOI)	Field of Science (FOS)	Percent
605	0210	3010	100%

Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
0210 - Water resources;

Field Of Science
3010 - Economics;

Keywords

water resource economics

water management

water transfers

water use efficiency

climate change

Goals / Objectives
Quantify water demand and value of water in competing and complementary water uses. Comments: Water managers and users make decisions regarding water use based on its value (whether social, environmental, or economic) to them and an implicit understanding of how their demand for water will change in response to social, environmental, and economic factors. Accurate estimates of value and demand are crucial to the implementation of effective water-saving policies and programs. Research undertaken in this objective will assist policymakers in understanding how to structure incentives and conservation programs to encourage technology adoption and water use efficiency. Evaluate and compare alternative water quantity and quality management strategies and institutions. Comments: Institutions and management strategies to address the allocation of groundwater and surface water and/or deal with water quality measures vary considerably. Efficient and effective policies to reach the goals of water agencies are critical and can be comprised of institutions such as taxes, subsidies, markets, collective action initiatives, and technological innovations. Research undertaken in this objective will assist policymakers in evaluating policies that improve water allocation and water quality institutions and meet policymakers goals.

Project Methods
Project 1 (Objective 2a). Estimate the value of water in agricultural production and other uses. Use water market transaction data and data from other sources to estimate water demand in different sectors of the economy across the western U.S. using the latest statistical techniques available from the field of agricultural industrial organization.Project 2 (Objective 2b). Explore the potential to create incentives for technology adoption and water use efficiency in Wyoming agriculture. Engage with producers who have installed various annual/real-time water/energy meter technologies in southeastern Wyoming, to understand their experiences with and without meters and compare their reactions with those of producers from neighboring Nebraska.Project 3 (Objective 4a). Evaluate and compare alternative water quantity allocation mechanisms, strategies, and institutions. Incorporate improved hydrology and modeling techniques into development of a regional hydro-economic model to examine the farm-level and community-level economic impacts of developing alternative groundwater management strategies in southeastern Wyoming (overlying the Ogallala Aquifer).Project 4 (Objective 4c). Explore potential for water transfers to help Wyoming and other Colorado River Upper Basin States to meet their obligations under the Colorado River Compact. Engagement methods: Public meetings, focus groups, soliciting feedback from stakeholders in an iterative fashion. Research methods: Surveys and focus groups of agricultural water users and other water users, input-output analysis, evaluation of alternative mechanisms within an optimization and policy simulation frameworks.

Progress 01/27/20 to 09/30/20

Outputs
Target Audience:Results will improve understanding of the costs, benefits, and bio-economic challenges of using water transfers in this context. Target audience during this reporting period is consequently policymakers, agricultural water users, other water users, and other stakeholders. Note however that the process of developing a regional response to the anticipated supply-demand imbalance in the Colorado River Basin is inherently iterative; policymakers and stakeholders also drive market design and development. Changes/Problems:Objective 1. The two graduate students had planned oral, in-person presentations of their thesis results, which did not happen due to the global pandemic. These presentations could have been transitioned to virtual, but the challenges of the early months of the global pandemic limited time available for planning and implementing such things. Production of research and extension materials out of these thesis projects was also delayed by the pandemic. Objective 2. Engagement with water users and other stakeholders for the demand management feasibility study with the Wyoming State Engineer's Office was reduced in scope due to the pandemic. Planned community meetings were canceled, and focus groups were held via zoom rather than in-person. What opportunities for training and professional development has the project provided?Objective 1. Two graduate students completed their M.S. thesis research projects under this objective during the reporting period. One is now working at USDA-RMA in Kansas City and the other is at America Farmland Trust. Both benefitted from the research experience they received under my supervision. Objective 2. One of these two graduate students received additional training by assisting with the regional economic impact analysis associated with water transfers in the Wyoming portion of the Colorado River Basin. Objective 2. Although the regional economic impact analysis is not yet final, the vetting process that the study underwent in its final stages during the report period has informed many water users and stakeholders about the economic tradeoffs and institutional constraints inherent in the policy options under analysis. How have the results been disseminated to communities of interest?Objective 1. Both student M.S. thesis presentations were broadcast over zoom. The ecological impacts thesis presentation was presented at a regional conference. Objective 2. Preliminary regional economic impact results have been presented to the water committee of the Wyoming Stock Growers Association, a regional conference on Colorado River Basin issues, and at focus groups comprised of water users and other stakeholders. What do you plan to do during the next reporting period to accomplish the goals?Objective 1. Results on groundwater management over the Wyoming Ogallala and on ecological and economic imapacts of a water demand management program in the Wyoming Colorado River Basin will be disseminated through written materials. Objective 2. Results of the regional economic impact study and the demand management feasibility study will be disseminated through written materials as well as a webinar and a series of in-person presentations (covid permitting) throughout the Wyoming Colorado River Basin. Objective 2. Begin work to expand the regional economic impacts study to include other economy sectors (in addition to agriculture), reservoir storage, water supply under uncertainty, and a more realistic baseline.

Impacts
What was accomplished under these goals? Objective 1. Under the direction of Hansen, a graduate student completed analysis using annual and intra-seasonal farm-level dynamic optimization models to determine whether incorporating intra-seasonal decision-making makes the model more realistic in a meaningful way, and whether water-use efficiency technologies can be beneficial to producers if policies to encourage or mandate water use reductions were implemented (Ogallala Aquifer). Objective 1. Under the direction of Hansen, a graduate student completed an analysis of the ecological and economic trade-offs associated with programs encouraging voluntary water conservation practices on irrigated rangelands that could help Wyoming to meet its obligations to downstream states under the Colorado River Compact. Collaborators include Trout Unlimited, The Nature Conservancy, conservation districts and ranchers in the area. Objective 2. Hansen is assessing the regional economic impacts of water transfers in the Wyoming portion of the Colorado River Basin, to assist water rights holders and other stakeholders in evaluating a potential demand management program (water conservation) in the region. The study was close to final at the end of the reporting period and has already influenced the conversation in Wyoming about the costs and benefits of a potential demand management program and additional scientific data needs to help evaluate the program. Objective 2. With University of Wyoming Extension colleagues, Hansen is assisting the Wyoming State Engineer's Office to assess stakeholder interest in a water demand management program, which could help Wyoming and other Upper Colorado River Basin states meet their obligations under the Colorado River Compact. During the reporting period, Hansen and colleagues hosted focus group meetings with agricultural, municipal, and industrial water users and other stakeholders, to explain what a potential demand management program would look like and to receive feedback.

Publications

• Type: Conference Papers and Presentations Status: Published Year Published: 2020 Citation: Yeatman, E., K. Hansen, G. Paige, A. MacKinnon, and J. Albers. Economic and Ecological Tradeoffs of Water Conservation in the Upper Green River Basin Selected presentation at the Western Agricultural Economics Association Annual Meeting, virtual (June 29-July 1, 2020). Presentation by Yeatman.
• Type: Conference Papers and Presentations Status: Published Year Published: 2020 Citation: Hansen, K. R. Coupal, G. Paige, and A. MacKinnon. 2020. Wyoming Conservation Exchange: A Grassroots Conservation Program. Selected presentation at the Western Agricultural Economics Association Annual Meeting, virtual (June 29-July 1, 2020).
• Type: Conference Papers and Presentations Status: Published Year Published: 2020 Citation: Hansen, K., R. Coupal, E. Yeatman, and D. Bennett. Economic Assessment of a Potential Water Demand Management Program in the Wyoming Colorado River Basin Upper Colorado River Basin Water Forum, Grand Junction, CO (virtual conference, November 4-5, 2020).
• Type: Other Status: Published Year Published: 2020 Citation: MacKinnon, A., G. Paige, and K. Hansen. 2020. Wyoming Stakeholder Engagement. Invited Presentation at the State Water Forum, hosted by Wyoming State Engineers Office. Cheyenne, WY. January 15, 2020.
• Type: Other Status: Published Year Published: 2020 Citation: Hansen, K. and R. Coupal. 2020. Economic Assessment of a Potential Demand Management Program in the Wyoming Portion of the Colorado River Basin. Invited Presentation at the State Water Forum, hosted by Wyoming State Engineers Office. Cheyenne, WY. January 15, 2020.
• Type: Other Status: Published Year Published: 2020 Citation: Hansen, K. 2020. Economic Impacts of a Demand Management Program in Wyomings Colorado River Basin. Invited presentations at the Wyoming Stock Growers Association Summer Meeting, Rock Springs, WY (August 25, 2020).
• Type: Other Status: Published Year Published: 2020 Citation: Paige, G., A. MacKinnon, and K. Hansen. 2020. Wyoming State Engineers Office Water User Focus Groups on a Water Demand Management Program in Wyomings Colorado River Basin, virtual (eight sessions, September 2020).