Conference Agenda

Safe, reliable, and equitable water access is critical for sustaining healthy livelihoods. Climate water stress is a growing challenge internationally making it difficult to achieve sustainable management of river basins. Addressing the problem requires integrated multi-sector water management strategies for climate resilience. The Water-Energy-Food-Ecosystems (WEFE) nexus offers promise as a comprehensive framework to guide science-based plans to achieve sustainable development goals. Several nexus approaches have been proposed in previous works. However, none to date has conceptualized, formulated, tested, validated, and applied a comprehensive dynamic optimization framework that includes several water-using sectors including ecosystems for a significant river basin supporting livelihoods of large numbers of people. The original contribution of this paper is to make headway on filling these gaps, taking Spain’s Ebro Basin as a case study, providing evidence to guide science-based policy reform. This work’s innovations illustrate the previously untested use of information to guide proposed water allocations among several economic sectors including protection of key ecological assets. Results provide a rigorous framework for measuring the level and distribution of benefits and costs among sectors and stakeholders. Findings reveal a range of policy choices that improve the hydrologic and economic performance of water management compared to the current policy for addressing climate change. Policy options that systematically account for the full range of benefits of environmental flows guide science-informed strategies for guiding climate resilience planning. They can increase stream flows in rivers, enhance water security and biodiversity, and reduce the economic burdens imposed by climate risks.

Public policies with different degrees of centralization face optimization problems at different administrative levels, which motivates beggar-thy-neighbor and free-riding behaviors that lead to insufficient regulations at jurisdictional boundaries. This paper investigates whether states exhibit these behaviors when implementing nonpoint-source (NPS) water pollution policies. I compile a unique and comprehensive dataset of three NPS policies and hydrological information using ArcGIS. Depending on the policies' characteristics, I use a Probit model and two Heckman selection models, respectively. I find that interstate rivers are treated with lower priority by the most decentralized policy, i.e. the Total Maximum Daily Load (TMDL) Program, but receive larger amounts of grants under the relatively centralized NPS Pollution Management Program. Large western states exhibit beggar-thy-neighbor behavior within 35 km of state borders, taking 0.6308 to 1.7478 more reporting cycles to treat upstream rivers than intrastate rivers, and exhibit free-riding behavior within 30 km of state borders, with 0.4917 to 1.0949 more reporting cycle to treat downstream rivers. In small eastern states, downstream rivers within 25 km of state borders show a free-riding behavior, taking 0.2639 to 0.5979 more reporting cycles to receive treatment. Each behavior leads to a large deadweight loss.

Increasing air temperatures caused by climate change increase water temperatures in rivers and lakes, which may have drastic consequences on these aquatic ecosystems. Empirical research suggests that forested buffers could provide cooling by shading waters. Further, forested riparian buffers provide a source of detritus and large woody debris for aquatic organisms. We study how should society adapt to increasing temperatures and stress to aquatic ecosystems in an agricultural landscape by developing a theoretical framework for the analysis of the socially optimal adaptation that covers both public goods and negative externalities. We characterize the optimal trajectories of adaptation in an empirical case of river running through an agricultural landscape. We consider three IPCC’s climate change scenarios: RCP2.6, RCP4.5, and RCP8.5 leading to differing summer temperatures and precipitation and water temperatures. We solve privately and socially optimal solutions to agriculture in terms of fertilization and forested buffer strip as adaptation strategies. We also solve for nitrogen tax rate to control nutrient loading and instrument to promote shading in different cases. We also study economic losses if a society does not adapt to climate change or adapts only to increasing yields but ignores externalities and public goods aspects. Our results suggest that the optimal adaptation requires that the society adjusts over time the applied differentiated tax and subsidy rates. Forested buffer restoration mitigates future warming and help maintain cold-water habitats but only partially. More surprising finding was that differences between RCPs were not big. The difference in NPV between the optimal adaption and no-adaption cases was about 1540 €/ha on average across the RCPs in favor of optimal adaptation. The difference between the optimal and private adaptation was much bigger: about 5200 €/ha on average across the RCPs. Optimal adaptation policy comprising of instruments to forested buffers and spatiotemporal use of instruments towards nutrient loading is much needed for the future.