A protocol-based integrated microeconomic Positive Multi-Attribute Utility Programming and HEC-HMS modeling framework to assess economic efficiency-water conservation tradeoffs in water reallocation policies

Water demand is increasing due to population growth and changing distributions of wealth (OECD 2015), and climate change is reducing water availability in arid and semi-arid basins (Bates et al. 2008). The combined effects of growing demand and diminishing supply will cause relevant impacts on the environment and the economy, particularly the agricultural sector, the largest water user and that concentrating the marginal uses (i.e. least valuable) of the resource. Policies that reallocate available water among users are necessary to mitigate economic losses and ensure sufficient resources are conserved for the environment. To this end, Spanish river basin authorities have developed Drought Management Plans (DMPs) aiming at minimizing the environmental, economic and social impacts of drought episodes. DMPs define drought indices and apply temporary water restrictions, which are now under revision to adapt to most recent socioeconomic and climatic changes and forecasts (CHT 2017). In defining drought indices and restrictions, hydrologic and economic information plays a critical role: it informs policy makers on the economic and environmental outcomes of projected policies and the relevant tradeoffs between them, and thus prevents maladaptation. This study presents a methodological framework to couple a microeconomic Positive Multi-Attribute Utility Programming (PMAUP) model that represents the behavior of economic agents and simulates their policy responses with a Hydrologic Modeling System (HEC-HMS) designed to simulate the precipitation-runoff processes of dendritic basins. While the HEC-HMS model is a popular tool for the development of hydrologic applications this is, to the best of our knowledge, the first study that uses the HEC-HMS model in concert with an agricultural economics module. The coupling between the PMAUP and HEC-HMS models occurs in a sequential, modular fashion through common spatial (land use and land use changes) and water availability variables (water yield and availability). The resulting coupled PMAUP - HEC-HMS model seeks to represent the feedback between the behavior of socio-economic agents and their impact on land use and water availability. The integrated model is illustrated by simulating the impacts of alternative drought episodes and the corresponding irrigation restrictions foreseen under the new Tagus River Basin DMP in the Upper Tagus Sub-basin in the center of the Iberian Peninsula.