Duration: 10/01/2009 to 09/30/2014

Administrative Advisor(s):

NIFA Reps:

Non-Technical Summary

Statement of Issues and Justification

Water has emerged as a focal point of science, economics and policy debates throughout the western United States. Growing urban and environmental demands will likely put considerable burdens on conservation and transfers from agriculture, which currently consumes about 80 percent of the water in the 17 western states. In addition, the quest to better manage water supplies will intensify efforts at water reuse and desalination technologies and infrastructure, and improved methods and institutions for managing groundwater resources. The difficulty of meeting emerging needs is exacerbated by the threat of global warming, which is expected to increase shortages and adversely affect the timing of stream flows in parts of the west. Adjusting to more competition, higher opportunity costs, and possibly fewer supplies will challenge all current water users, especially irrigated agriculture as it tries to meet current and future food security needs. Rural economies are at risk of losing a significant part of their economic base as the amount of water allocated to irrigation diminishes. Conflicts among states, between agricultural, urban and environmental uses, and between ground and surface water irrigators within states, continue to intensify. In some parts of the west quantity problems are compounded by quality concerns, especially salinity and nitrates. The proposed research addresses the technical issues, policy choices and institutional options for coping with these challenges.

On the technological front, there is a continuing need to find technologies for meeting agricultural, urban and environmental demands with less water, and for assessing opportunities to more effectively manage demands and supplies, evaluate management and institutional alternatives, and assess long-run infrastructure needs. Vulnerability extends also to water quality issues that are likely to rise with increased effluent burdens from urban development and diminished streamflows for assimilation. There is also a critical need to address salinity problems resulting from a combination of long-term irrigation and insufficient water for leaching the salts below the root zone. Worldwide salinity problems are a threat to agricultural productivity and to ecological and wildlife concerns. Nitrates in groundwater are another quality issue that merits attention in several parts of the west. In most cases the dominant source of nitrate pollution is nitrate leaching, which often results from the application of excess nitrogen and irrigation water.

Current water issues that have emerged as especially important to the western states fall into two categories: those associated with understanding the regional economic impacts resulting from energy and environmental policy alternatives and from climate change; and those associated with the design and evaluation of institutions to meet emerging water resource needs. Under the Obama administration there are likely to be many initiatives to improve environmental quality, manage global warming and conserve natural resources. We must be prepared to contribute policy ideas and to evaluate the economic impacts from policy options affecting the western states. Impacts from global warming are especially important to the Western U.S. where rising temperatures have already begun to change the timing of stream flows, produce weather extremes and increase water scarcity. Analyzing these impacts effectively and accurately will require the development of watershed models which do a better job of integrating the contributions from economic, hydrologic and biologic assessments.

Conventional water conservation programs for irrigated agriculture are unlikely to be effective for meeting emerging needs, because such programs focus on reducing water applied to farms instead of water consumed by plants and are not tailored to the current structure of western agriculture. The voluntary conservation programs of the past may need to be replaced by more extensive use of subsidies and regulations before irrigation consumptive use can be significantly reduced to reflect reduced supplies and growing demands for non-agricultural uses. The historical emphasis on conservation measures for small farms (those less than $250,000 in annual sales) may need to be modified as conservation needs become more urgent. Small farms represent three-fourths of the participants in conservation programs, but only about one-third of total irrigated acreage.

Meeting tomorrows needs will also require new institutional arrangements that can better accommodate scarcity, new technologies and policy changes. Future institutional arrangements will need to do a better job of accounting for the changing inter-sector values of water, while also satisfying public objectives such as sustainability and inter-generational equity. This is expected to involve wider use of markets, auction technologies, more responsive political processes, water law revisions, new risk management programs and perhaps other changes. Some of the specific institutional challenges include: arrangements for conjunctive management of ground and surface water; developing procedures for extending crop insurance coverage to deficit irrigation; and identifying ways of reducing transaction costs associated with water markets.

The need for undertaking the proposed research becomes self-evident when we look at the myriad of stakeholders who stand to benefit from the resulting findings. These stakeholders include agricultural producers, irrigation and conservation districts, private water-supply organizations, state environmental/water quality management programs, consumers, federal agencies such as the Bureau of Reclamation, Army Corps of Engineers, USDA (NRCS and CSREES) and EPA, among others. The findings from the proposed research are expected to have a major impact on these stakeholders, all of whom are intimately involved in water allocation, planning and management decisions that affect western irrigated agriculture.

The proposed research has a high degree of technical feasibility. The research team consists of a multi-disciplinary group of water professionals with rigorous training in the conceptual-theoretical aspects of water economics and technology, as well as hands-on experience in policy analysis. The disciplines represented on preceding committees (W-1190) include agricultural and natural resource economics, irrigation engineering, agronomy, soil science and hydrology. Researchers from 14 states, ERS and ARS, and the Bureau of Reclamation are involved in the W-1190 project and are expected to contribute to this proposal as well. It is expected that contributors from other states and agencies may also choose to join this effort.

The proposed research is ideally suited to be conducted as a multi-state regional project because of the commonality of the issues to be studied across the participating states. All states in the region need to find cost-effective ways of reducing the consumptive use of water by irrigated agriculture. Similarly, integration of water conservation policy with institutional changes and agricultural production risks are rapidly emerging as issues of major concern to irrigated agriculture in practically all western states. Economic impact assessments leading to improved resource policy necessarily involve issues that cut across state lines. Finally, concerns about the efficacy and adequacy of current water laws, institutions and procedures in addressing the changing and challenging water needs of irrigated agriculture, and the need for efficient and equitable inter-sector mobilization of water are shared by most every state in the region. All three objectives of the proposed research address issues of common concern and can be addressed most effectively as a regional project.

The likely impacts from the successful completion of the proposed research include:
1) provide improved irrigation management strategies for limited water; 2) provide information on the potential agricultural risks and income losses associated with irrigation water shortfalls due to federal and state policy decisions, as well as the impact of potential mitigation strategies; 3) development of a deficit irrigation insurance product for the Topeka RMA Region (Colorado, Kansas and Nebraska); 4) provide critical conservation and economic information, across farm-size groups, needed to more effectively balance conservation needs between small farm and environmental policy goals; 5) assessment of economic and natural resource implications of alternative global warming policies; 6) identification and assessment of procedures for improving water markets; and 7) assessments of current and proposed laws, institutions, and procedures for meeting existing and emerging water demands.

Related, Current and Previous Work

W-1190, which is the regional project that is the immediate predecessor to this proposal, is titled Interfacing technological, economic, and institutional principles for managing inter-sector mobilization of water. It was authorized for the period October 1, 2004 to September 30, 2009. The scientists participating in W-1190 addressed the following three objectives: 1) Develop and evaluate alternative technologies to monitor environmental effects of water allocation and management; 2) Quantify comparative economic values of water in alternative uses; and 3) Assess the effectiveness of alternative management institutions, laws, and policies for water allocation. Activities under these objectives for the first four years of the project are briefly reviewed below, including accomplishments, impacts and aspects needing further investigation. Much more detailed discussions of accomplishments can be found in the annual reports for W-1190.

Activities under Objective 1 of W-1190 focused on farm level adjustments to improve water quality. The issue receiving the most attention was salinity. Methods of managing salinity problems at the farm level and the basin-wide implications of salinity control policies were extensively analyzed. Considerable progress was also made in understanding how to manage irrigation systems to minimize pollution from nitrates and atrazine. Management options to address quantity issues were also researched under this objective, with emphasis on developing production functions and models for managing irrigation systems when less than a full water supply is available. Modeling improvements occurred as a result of improved production functions and improved ET estimates at a watershed scale.

Activities under Objective 2 of W-1190 focused on agricultural and natural resource policy alternatives and how they affect irrigated agriculture and the general economy. A major five state effort supported by RMA, USDA funds and managed by ERS, USDA addressed the irrigated production risk associated with federal water policy. Other major multi-state products included consideration of groundwater mining policies, reservoir management policies and the potential economic impacts from global warming.

Activities under Objective 3 of W-1190 focused on issues of conflict resolution, markets for moving water to higher valued uses, and on the need for revisions to current water allocation laws and procedures. Game models were used to address in-stream flow endangered species issues involving Colorado, Nebraska and Wyoming. Water allocation laws in Hawaii, Washington and other states were evaluated. Methods of improving water markets were considered directly for Colorado, California, Nebraska and Arizona, but most findings being relevant to all 17 western states.

More detailed summaries of project activities can be found in the annual progress reports, available at http://www.lgu.umd.edu/project/pub.cfm?trackID=299.

One indicator of W-1190 project productivity is the large amount of new knowledge on water issues that has been published in both academic and applied outlets. From 2005 through 2008 W-1190 research accomplishments included 53 journal articles, 48 technical reports, 59 professional presentations, 6 book chapters and numerous miscellaneous outputs (See Appendix  W1190 publications for a detailed listing).

Although rigorous research outputs are essential, they are not alone sufficient for the project to have made positive impacts. In order to positively impact the management decisions of water users or affect policy decisions, scientists must succeed in disseminating the new knowledge to managers and policy decision-makers, and delivering knowledge that is relevant and valued so that it ultimately affects decision-makers choices. The members of W-1190 have devoted considerable effort to both of these conditions and there is much evidence that their efforts have been successful.

Participants in W-1190 have been especially active in influencing water policy decisions. Prime examples include impacts on the agenda for addressing global warming which have resulted from climate change impact studies; effects on reservoir operating plans to address endangered species concerns, especially for the Klamath Basin in California and Oregon; the crafting of new water allocation policies in Hawaii based on research findings; policy decisions to expand the use of water banks and markets in several states, spurred at least in part by several studies which document the economic gains from markets; and water conservation policy changes resulting from studies which have evaluated irrigation equipment and infrastructure investment programs.
Participants in W-1190 have also actively disseminated information to producers on best management practices for meeting water quantity and water quality objectives. Prime examples include: guidelines for limiting production risk under water-limiting conditions in Kansas, Nebraska and Oregon and internet distribution of irrigation management models for minimizing the economic consequences of water supply limitations.

In sum, the members of W-1190 have made significant progress toward meeting the objectives in the project. At the same time, there remain many important questions about water allocation that require further investigation. These questions have emerged as new frontiers based on research over the past four years, and also reflect the recent evolution of policy and economic conditions. For instance, the water supply and economic implications of programs to address global warming and reduce dependence on imported oil merit increased attention because of heightened policy concerns. Also the role of water markets and other institutional mechanisms for addressing growing water resource demands has emerged as being especially important for meeting future needs. Research results suggest that markets have great potential if ways can be found to protect third-party interests without raising transaction costs to prohibitive levels. These critical questions and others which focus on the practical challenges of water management will be addressed in the proposed research.

A CRIS search was conducted to identify active multistate projects related to the proposed work. The search identified seven multistate projects that would complement, but not duplicate the activities we propose. The proposed project is focused on water allocation issues in the arid, water-short west, water policy assessments, irrigation management and institutional issues. In contrast, only two of the seven projects focus on arid areas, and three of the seven are focused on water quality. These related projects are briefly reviewed below and their potential synergies with this project are also discussed.

Two projects address irrigation issues: W1128, Reducing Barriers to Adoption of Micro-irrigation and WERA202, Climatic Data Application in Irrigation Scheduling and Water Conservation. Findings concerning micro-irrigation may be helpful as part of the search for ways to reduce the consumptive use of water from irrigation. The ongoing research on the use of climate data in irrigation scheduling is likely to produce results that will be helpful in refining the irrigation management and policy assessment models to be developed under this proposal. Both of these regional projects are narrowly focused on issues that are related to, but do not duplicate, the work outlined in this proposal.

Three of the multistate projects focus on water quality: WERA103, Nutrient Management and Water Quality; NCDC216, Water Management and Quality for Ornamental Crop Production and Health; and S1042, Modeling for TMDL Development and Watershed Based Planning, Management and Assessment. The nutrient management project may have some overlap with proposed analyses of salinity problems in the west, and the methodologies used to assess TMDLs at a watershed scale may have applicability to proposed regional assessments of water quantity issues, but there does not appear to be any direct duplication of work proposed herein. Ornamental crop production has little relevance in the west in terms of either water use or economic impact.

One project, W2133, Benefits and Costs of Natural Resources Policies Affecting Public and Private Lands, proposes to address issues of concern to this project only indirectly or perhaps not at all, but would still complement our proposed work for other reasons. This effort is concerned with estimating the economic values of various environmental resources, including the recreation value of water bodies. Such values will be applicable for our purposes as inputs for proposed regional models. Some of the participants in this project also have an interest in valuation techniques and regularly interact with the members of W-2133 in other settings. More formal interaction with this project, perhaps via a joint or overlapping annual meeting, may be desirable.

Objectives

1. Develop farm-level irrigation strategies to address water quantity and quality problems
   
2. Examine Regional Water-Related Impacts Associated with Energy, Environmental Policy, and Climate Change
   
3. Investigate Alternative Water Policy and Management Institutions
   

Methods

Objective 1: Develop farm-level irrigation water management strategies to address water quantity and quality problems. Previously, this regional project has conducted experiments and analyses to test several farm-level technologies at various locations. Texas, Colorado, Kansas, and Nebraska have evaluated technologies and practices including conservation tillage, alternative row spacing, variable-rate application of fertilizers, sub-surface drip irrigation, and soil salinization monitoring systems. Many of these technologies were found to be economically viable while protecting natural resources. Under this new proposal, these same scientists will turn their focus toward an ever-increasing irrigation and water resource problem in the west, namely salinization. Though there is ample evidence of saline soil and water conditions in the Western U.S., there is insufficient understanding of the distribution, extent and severity of salt-affected soil and water resources in the major watersheds. Method 1.1: Mapping the Extent and Severity of Soil and Water Salinity in Major River Basins in the Western U.S. Geo-spatial soil and water salinity inventories are invaluable in the initialization and validation of basin- and field-scale models. Without such inventories and spatial mapping of conditions, one cannot track the effects of water distribution policies, on-farm water management strategies, short- or long-term drought, or other changes in water use patterns, on soil and water quality, nor predict the effect of water use patterns on salt-impacted plant growth, regional water balances and economics. Recent basin-scale model assessments of salinity in the Arkansas River Basin in Colorado (Gates et al, 2002; Triana et al, 2005; and Burkhalter and Gates, 2006) show how the use of spatial maps of soil and water salinity can be used as input and validation data for such exercises. The same maps used for water and salt balance modeling were also used in a regional assessment of the economic impact of water supply and salinity in the river basin (Houck et al., 2006). Field-scale models of the effects of salinity on plant growth have also been developed as a part of this project in previous years (Shani et al., 2006; Walker et al, 2006; Walker and Ivans, 2006). Such models have the ability to demonstrate regional-, sub-regional-, and field-specific responses when tied to geo-referenced salt and water distributions proposed in this sub-project. Maps of surface- and ground water and soil salinity within selected model locations, will be prepared from geo-located water and soil samples and remotely-sensed electrical conductivity data. Calibration of the remotely-sensed data will be conducted against the physical soil samples using the protocols from established methods in the literature (Wittler et al., 2006). Spatial and temporal data of soil salinity on individual irrigated fields will be investigated under major crops (pecan, alfalfa and cotton) in the Rio Grande Project area, and the Bear and Sevier River Basins of Utah (alfalfa, wheat, and silage corn). Targeted soil samples will be collected using suitable sample planning algorithms (ESAP, US Soil Salinity Lab) to validate the remotely-sensed data. Effects of major soil variables (e.g., clay content, moisture) on the accuracy of the data will be evaluated to develop empirical equations that can be used to estimate field-scale soil salinity based on remotely-sensed data and other soil variables. Collaborators: Utah State, Colorado State, and Texas A&M, El Paso Method 1.2: Re-evaluating Plant Salinity Tolerance in Variable Soil and Water Salinity Conditions Traditional plant salt tolerance data, on which salinity effects on plant growth and performance are based, are decades old and were developed in California, Israel, and Australia under very different soil, climate, and salt chemistry conditions than are prevalent in many areas of the Desert Southwest, the Intermountain West, and Pacific Northwest. Therefore, there is a significant need for developing new standards and trends for basic plant salt tolerance under regionally-specific climate, soil and water conditions. This information is critical to tying the distribution of soil and water salinity to regional water use, plant productivity and land use sustainability. Plant salt tolerance work will be conducted in each region under carefully controlled conditions. Sand culture columns will be used to establish chosen species under non-saline conditions followed by exposure to preset levels of soil water salinity or surrogate irrigation water from representative locations reflecting regional soil and water chemistry and climatic conditions. Plant growth, yield and quality components (protein content, grade, etc.) will also be measured. From this data, plant-salinity response curves, applicable to regionally-specific conditions, will then be developed for each species. Collaborators: Utah State, Colorado State, and Texas A&M, El Paso Method 1.3: Estimating Crop-Water Production Functions for Varying Crop Water Application Rates and Water Quality Levels Methods will be developed to combine economic crop water production functions at the farm and basin level. Farm level decisions will be examined as they relate to the demand for water applied as application rate varies with the price of the crop and water. Basin level demands will be addressed as they relate to the demand for crop water consumed at the basin scale as water consumption varies with water price. While the farmer normally varies water application rates according to the price of water, water rights administration requires information on the amount of water depleted by the plant. Tracking crop water depletion in the face of price or policy changes is essential in order to keep western river basins balanced in the face of increasing population growth and worldwide demand for food. With the actuality of recurring droughts in the urban West, treated wastewater replaces surface water supplies in an increasing number of regions. Treated wastewater supplies are more stable and secure, and could be more cost effective to farmers. However, treated wastewater contains elevated levels of salinity that imply likely yield losses. Since the fraction of treated wastewater in irrigation is expected to grow, a study that provides the relationship between water quantity, water quality, technology, management, yield and economic consequences would be an important contribution to the region. Collaborators: Univ. of Idaho, New Mexico State, and UC Riverside Method 1.4: Publication of Extension Educational Guides for Evaluating Opportunities for, and Managing, Deficit Irrigation Strategies. Modeling studies (Scheierling et al., 2006) and field studies (Schneekloth et al., 1991) have indicated that for many crops in the West, there are significant opportunities for economically-viable deficit irrigation strategies. As water supplies are parceled out to increasing numbers of users and uses, irrigators must become more flexible and technically trained to identify and track crop development and water use patterns that are critical to taking advantage of deficit irrigation. A multi-state effort is currently underway to produce a series of guides to educate irrigators and policy makers on the opportunities for, and physical management realities of, deficit irrigation in the West. These documents reflect the current interest in this rapidly emerging area, and offer all sides of the debate, accurate, science-based information on the opportunities and limitations associated with deficit irrigation. Collaborators: Montana State Univ., Utah State Univ., Colorado State Univ. and North Dakota State Univ. Objective 2: Examine Regional Water-Related Impacts Associated with Energy, Environmental Policy, and Climate Change Activities under this objective address the challenges that rapid population growth and demographic changes have on the competition for, conflict over, and scarcity of water. These activities assist local and regional efforts to improve regional water resource planning and management within the context of changing energy, environmental and climate policies. The methods provide examples of both ongoing and anticipated activities that support the design and development of appropriate and responsive water resource strategies. Many aspects of these strategies (e.g., setting goals, identifying activities, and evaluating alternatives) often require consideration of issues related to the regional scope, character, and interdependence of water users and suppliers within a watershed. Method 2.1 Modeling Surface Water and Storage Opportunities in Arid Agricultural Regions Arid and semi-arid climates characterize many of the agriculturally productive regions of the world, including much of the western U.S. Managing water supplies and demands in these regions and finding opportunities to improve water use and allocation is a constant concern. One of the methods for identifying and evaluating water management opportunities is hydro-economic modeling (Vaux and Howitt, 1984; Ward et al., 2001). Hydro-economic models link investment decisions of water resource planning authorities, water allocation decisions of water managers, and water consumption decisions of water users in a spatially and temporally-differentiated framework consistent with the characteristics of individual basins. Such models are widely used as policy guides in the energy, agricultural and forest sectors in the United States. Efforts are continuing in the development and application of hydro-economic models to arid-zone agriculture. Of particular interest are the infrastructure needs and opportunities to increase water availability and reliability in economically challenged areas. Collaborators: New Mexico State, Colorado State, Univ. of Idaho, and Univ. of Florida. Method 2.2 Regional Aquifer Management under Changes in Climate and Environmental Policies Researchers are examining management, use and institutions governing the waters of the Ogallala aquifer. This aquifer is a critical resource in the arid High Plains, providing valuable economic services to the communities and rural industries of the region. Sustained, long-run use of these waters by agriculture is a critical goal, and the development of efficient groundwater management and irrigation systems are key to understanding water-related impacts in this region, and in identifying policy and institutional strategies that perform best under these conditions. In particular, strategies are developed that consider climate change and identify water management systems that are robust to changes in climate. Collaborators: Kansas State, Colorado State, and Univ. of Nebraska Method 2.3 Role of Adaptation in Reducing the Impacts of Climate Change and Drought on Water and Agriculture Drought management and climate change are emerging as major areas of scrutiny among Western water managers as policy makers and the public raise questions and concerns regarding the reliability of water systems in times of scarcity. Scarcity is also affected by rising population, economic demands, and environmental regulations, which with climate change and sustained drought threaten existing patterns of water allocation and use. Methods for identifying appropriate water scarcity adaptation strategies is needed for several purposes, including regional water resource planning, drought management planning, climate change adaptation, and risk management. In particular, this method focuses on identification and evaluation of adaptation strategies and responses using a variety of economic approaches, including hydro-economic watershed models and models that simulate irrigation water management. Water and agricultural resources are among the most important sectors that are sensitive to climatic changes (Adams et al., 1998; Cline 1992; Frederick 1993; Hurd et al., 1999a, 1999b; Lettenmaier and Scheer 1991; Lettenmaier et al., 1993). Knowledge and understanding continue to evolve about the nature, extent, and distribution of the physical effects of possible climate change on water and agricultural resources. However, much less is known about the economic responses and impacts that may emerge and the possible effects that adaptation, and adaptive capacity, have on human and natural systems. The interaction between climate, water and agriculture is especially critical in Southern California. A proposed adaptive capacity of irrigated agriculture is the ability to conjunctively use surface, ground, and treated wastewater subject to local regulations. Existing regulations and market conditions may send opposite signals, thus affecting the adaptive capacity of irrigators. Incorporating policy interventions that affect sustainable use of water resources into the decisions of private and public agencies would enhance our understanding of the adaptive capacity of farmers and land and water resources use under various climate change scenarios. Collaborators: New Mexico State, Univ. of Idaho, Kansas State, Texas A&M, UC Riverside, and Univ. of Hawaii. Method 2.4 Towards a Sustainable Future for Western Irrigated Agriculture: The Dynamic Adjustment Path of Technology and Water Management in the Face of Climate Change and Growing Energy Sector Demands Irrigated agriculture accounts for nearly half the value of U.S. crop sales and 80-90 % of consumptive water use in the U.S. While continued population growth, ecological and environmental demands, and Native American water-right claims continue to drive water resource conflicts, climate change forecasts and water demands for a growing bio-fuels sector are placing new pressures on existing water resource allocations, heightening awareness of the importance of water conservation in irrigated agriculture. Many factors (producer, farm, economic, institutional, and environmental) influence irrigation water-management and technology adoption decisions and USDA water conservation and quality goals. Climate change and energy sector growth raise important questions: (1) Can irrigated agriculture adjust to climate-adjusted water supplies and water demands through adoption of conserving technologies, water-management practices, and/or crop shifts alone?; (2) Will changes in water institutions be needed to complement water conservation policy for managing increasingly scarce agricultural water supplies?; and (3) How will these changes impact irrigated agriculture, water conservation/quality goals, the environment, and rural economies? This task examines the sustainability of U.S. irrigated agriculture as climate change and new energy-sector water demands place increasing pressures on the conservation and reallocation of water resources. Using the Farm & Ranch Irrigation Survey time-series database this research examines irrigated agricultures shift to a sustainable future by: 1) describing trends in producer adoption of water-conserving irrigation technology/water-management practices; 2) developing and applying an analytic framework that endogenizes technology/management adjustments within the traditional dynamic-optimization framework for irrigation water use; and 3) evaluating the relative importance of alternatives influencing producer irrigation production practice decisions. Accounting for endogenous technical change will improve measures of producer behavioral response to expected changes in irrigation water-supply conditions due to drought, climate change, and/or new energy development demands. Collaborators: USDA-ERS, and Univ. of Hawaii. Objective 3: Investigate Alternative Water Policy and Management Institutions The application of water management research, technologies, and decision-making tools is at the policy level. Water management institutions need to adopt new tools and improved technologies. Thus any complete analysis of water management challenges in the western United States must include analysis of the institutions that govern water management. This objective analyzes alternative water management institutions and policies in the context of increased demand for water quantity and quality in the western US. The western US is facing a future of explosive water demand coupled with limited water supplies. This objective reflects W-1190 history of research leadership in economic analysis of water institutions and policies. The scope of that research begins at the farm level and expands to an irrigation district, to watershed, to state, and to multistate research such as seminal research on the Colorado and Rio Grande River Basins. Method 3.1 Identify, evaluate, and analyze political externalities in water management Water is an economic good. It is scarce and valuable and needs to be allocated among competing needs and users. However, water is a political economic good. Water management decisions that maximize a certain decision makers political economic utility may impose positive or negative impacts upon other stakeholders. Positive and negative externalities and the inefficiencies of political decision-making are well understood by natural resource economists, but political economic externalities are less understood. Case studies of political decision-making in water resource management will be reviewed. Quantitative and qualitative assessments of these case studies will be used to develop criteria for identification of political externalities. Common elements of these cases will be used to analyze the political economics of water management. In addition, experiments will address the political economy of water policy design and implementation in several watersheds and/or water districts in California. Policies always create winners and losers. The political economy of the reform process is affected by the political power of the groups targeted by the policy. Forecasting the political outcome of a given policy may save significant social transaction costs. Contemporary policy issues will be addressed in the context of each location studied. Collaborators: North Dakota State, Univ. of Hawaii, Kansas State, and UC Riverside. Method 3.2 Assess alternative water quantity and quality markets In the Western U.S., growing demand for water for municipal, industrial, recreation and environmental uses can only be met by reallocating water from current users, primarily agriculture. Water markets offer the potential for meeting these emerging needs most efficiently by facilitating transfers from less to more valuable uses. The idea of markets is not new and water right transfers within and between uses do occur in most locations, but no one has successfully implemented a smoothly operating water market with low transaction costs. Market designs must be developed which provide for efficient transfers while protecting third party interests. Research led by W-190 and W-1190 members, has developed a growing literature on markets to trade water (Colby and Saliba, 1987; Hearne and Easter, 1997). With the growing interest of the Environmental Protection Agency and state agencies in cap-and-trade policy for water pollution reduction, there is a need for increased research on the potential for water quality trading. Research is needed to assess the feasibility of point-nonpoint source trading in river basins. Empirical analyses of current water markets will be supplemented with simulations of alternative trading systems. Experimental economics techniques will also be used to investigate the effectiveness of various water market arrangements. Transactions costs, either from poor information, poor infrastructure, or limited buyers and sellers will be identified, and alternative market institutions proposed and assessed. Collaborators: Colorado State, Nebraska, Kansas State

Measurement of Progress and Results

Outputs

• Output of the work under Objective 1 includes basin-scale maps of soil and water salinity extent and severity. These maps form the foundational database from which predictions of the impact of changes in water management can be made for crop water use and production. These maps will include data that can be used to parameterize models for such predictions and constitute an accurate initial condition and validation data set so important to the operation of crop-water-production function modeling proposed in Objectives 2 and 3.
• An education document series on deficit irrigation will be developed. These documents are being published as training materials for the Certified Crop Advisor education programs in the participating states, but will have applicability to regional grower education throughout the west.
• Research products and outcomes will be published in a variety of outlets and forums, most notably peer-reviewed academic journals, special issues of journals, book chapters, project reports, extension bulletins and presentations at professional meetings and conferences.
• An International Drought Symposium will take place at UCR on March 23-28, 2010, including teams from Spain, Australia, South Africa, California and Mexico, and invited researchers and policy makers from several Colorado River Basin states. The Symposium will yield dialogue among the 5 country teams sharing their experience. The country papers will be published in a book that will serve as an output from work under this objective.
• Interaction with stakeholders in the case study locations will ensure certain impact of the work and future collaboration to repeat the experiments and expand them to additional policy issues. To do that, policy notes will be prepared and distributed as well

Outcomes or Projected Impacts

• Influence a wide-range of local, state, and regional governments and NGOs who are responsible for infrastructure and investment decisions, codes and zoning authorities, and other quasi-governmental authorities (such as irrigation and conservancy districts) who consider climate change in their planning or who recognize the potential significance of climate change impacts on the planning and operation of their program or organization.
• Agricultural producers and land managers will be educated on adopting approaches that better balance the benefits of biofeedstock production with the environmental costs imposed on water resources.
• The planned interdisciplinary, international symposium will provide a forum to allow exchange of experience among experts, policy makers, and water managers. The planned companion book that will be published will allow non-technical persons to access the information provided and will increase public involvement in drought management discussions
• The involvement of policy makers and stakeholders in experimentation of the process of designing and implementing policy interventions to deal with water scarcity, drought, water supply variability, and related water quality issues, will have a profound impact on the way policy interventions are being evaluated and recommended.
• Policy makers will gain understanding of how different institutional arrangements affect the ability of water quality markets to (a) achieve water quality standards and (b) reduce the overall cost of improving water quality compared to regulatory approaches.
• Climate change impacts and new energy sector demands on western water resources will alter the sustainable pathway for western irrigated agriculture. This research will develop economic models to address the adjustment process of western irrigated agriculture to these new resource allocation and environmental quality policy challenges. More specifically, this research will: (1) expand our ability to evaluate the impacts of alternative conservation/water-management strategies in response to increasingly scarce water supplies; (2) help to differentiate agricultural water demand adjustments more appropriately between general economic and policy-induced behavioral changes; and (3) significantly improve upon measurements of social welfare benefits and costs of alternative public resource policies. These measurement improvements can facilitate optimal water resource reallocation by helping public decision-makers differentiate between the need for improved water conservation policy versus institutional change in water resource management.
• Some of our efforts in this project are focused on methods of irrigation management when producers have less than a full water supply. We expect widespread adoption of deficit irrigation when water becomes limiting, rather than reducing irrigated acres or shifting to water-efficient crops. We expect net returns from irrigation to increase by about $30,000,000 per year in Nebraska alone if 75% of producers who face limitations will follow recommended practices.
• A computerized crop-water production function program for deficit irrigation conditions will be made available to producers. The program will enable producers to purchase crop insurance for a deficit irrigation strategy.
• Water markets will be established by one or more Natural Resources Districts within the next five years.
• Ongoing research under this project quantifies the field-, farm-, and watershed-level economic impacts of alternate policies for groundwater management in irrigated agriculture. We will establish a database of the spatial distribution and aggregate impacts of the estimated cost-effectiveness of these alternative strategies that can be used in regional, state, and local decision making.

Milestones

(2010): Adopt a common definition of political externalities and identify case studies to test the definition. Identify and compile project titles and abstracts from current and ongoing research programs on climate change and water resources to be used in the development of a special issue of a water resources management journal. Develop the initial dynamic economic modeling framework for determining the balance between the benefits of bio-feedstock production and the environmental costs imposed on water resources. An international symposium on drought impact and management is planned for March 2010. Develop an analytical framework that allows general assessment and quantitative evaluation and prioritization of various water policy interventions at state and basin levels. Develop the modeling framework for predicting and evaluating the adoption of new technologies within both surface- and groundwater-irrigated agriculture, endogenizing water management within alternative multi-crop sectors. Summarize the changing characteristics of western irrigated agriculture using time series FRIS data. Develop simulation models of groundwater demand for the Ogallala aquifer region. Develop simulation models of water quality markets. Develop a pilot deficit irrigation water production function program available for crop insurance providers. Complete deficit irrigation educational documents to be used as CCA training materials for the intermountain western states.

(2011): Refine and revise the modeling framework for determining the balance between the benefits of bio-feedstock production and the environmental costs imposed on water resources, based on peer review comments and feedback from the national meeting symposium held in year 1. Conduct a symposium on Water Policy and Management Challenges at the Heartland Environmental and Resource Economics Workshop. Validate groundwater management models for case study regions in the southern Ogallala region. Implement the deficit irrigation crop water production function program for crop insurance providers.

(2012): Publish special issue on climate change impacts in the Journal of Contemporary Water Research and Education. Plan a special journal edition featuring the conceptual presentation and case studies on political externalities will be prepared for an interdisciplinary, international journal. Employ the model for determining the balance between the benefits of bio-feedstock production and the environmental costs imposed on water resources, and use the results to construct decision support elements for stakeholders. Use models of groundwater use developed and validated in Years 1 and 2, to simulate impacts of changes in crop prices, energy prices, and climatic conditions on groundwater use. Use the models of water market interactions developed and validated in Years 1 and 2, to simulate impacts of different institutional rules on market performance.

(2013): Develop a white paper statement of the most promising next steps for climate change and water research. Design and propose a special symposium for a national meeting to present information on determining the balance between the benefits of bio-feedstock production with the environmental costs imposed on water resources this and related research outputs. Develop a platform in the form of working groups of researchers, policy makers, and water managers for feedback and suggested additions and modifications to the analytical framework initiated in Year 1 to evaluate and prioritize the various water policy interventions at state and basin levels. Integrate economic simulations of the consequences and risks of alternative Ogallala aquifer water management policies in the face of changing and uncertain energy prices, crop prices, and climatic conditions with an explicit hydrologic model to ascertain detailed hydrologic impacts. We will also conduct Monte Carlo simulations to quantify the impacts of systemic uncertainty. Integrate economi

Projected Participation

View Appendix E: Participation

Outreach Plan

Several tasks within this project will result in the presentation of special symposia at national scientific meetings as follows:
" An international symposium on Drought Impact and Management.
" A symposium on Climate Change Impacts on Water Resources based on the special issue of the Journal of Contemporary Water Research and Education.
" A symposium on Water Resource Impacts on Renewable Energy Development.
" A policy-oriented symposium on the FRIS survey-based time-series analysis of changes in irrigation technology and management will be arranged through USDA/ERS, USDAs Agricultural Economist Group, the DC Chapter of the AWRA, and other federal/state newsletter outlets.
" A symposium on Water Policy and Management Challenges in the West at the Heartland Environmental and Resource Economics Workshop, an annual conference funded by the EPA.

Several tasks within this project will result in the publication of special journal issues as follows:
" An edition on political externalities focusing on practical lessons for citizen and community response.
" A special issue on Climate Change Impacts on Water Resources in the Journal of Contemporary Water Research and Education.

Several tasks within this project will result in the publication of regional and national reports, white papers, educational materials, and special books or monographs as follows:
" A book of participating country experiences in dealing with drought. Chapter contributions will come from presenters at the international symposium on drought management
" A monograph addressing limited irrigation management strategies. The core of this monograph will be the procedures used to produce water-yield production functions, and conclusions drawn concerning best management strategies for limited irrigation.
" Publication of a series of CCA training modules on the identification and management of deficit irrigation strategies.
" FRIS survey-based time-series changes in irrigation technology and management will be published as USDA/ERS policy reports, in ERS and professional policy magazines (Amber Waves, Choices, etc.), as well as available for the general public and decision-makers through the ERS policy websites.
In addition to the specific outreach products discussed above, individual participants in the project will organize local workshops with stakeholders and local policy makers, conduct field demonstrations of technologies and procedures investigated within this project, publish Extension documents and research papers on sub-tasks and locally specific projects, train and mentor graduate and undergraduate students, and develop and promote local websites and newsletter products to disseminate information.

Organization/Governance

The committee will be organized with an executive board comprised of a Chair, Vice-Chair and Secretary. Each year the project participants will elect a new secretary. The positions will rotate upward year to year from Secretary to Chair. The Chair is responsible for the organization of the annual meeting the year he/she is serving, and is ultimately responsible for submission of the annual report as assisted by the Vice-Chair and Secretary. At times, the executive committee may choose to organize ad-hoc sub committees for various purposes such as proposal writing, special annual meeting events (e.g., field trips), etc.

Literature Cited

Adams, R.M., B.H. Hurd, S. Lenhart, and N. Leary. 1998. Effects of Global Climate Change on Agriculture: An Interpretive Review. Climate Research 11:19-30.

Burkhalter, J.P. and T. K. Gates. 2006. Evaluating Regional Solutions to Salinization and
Waterlogging in an Irrigated River Valley. Journal of Irrigation and Drainage Engineering, 132(1): 21-30.

Cline, W.R. 1992. The Economics of Global Warming. Wash. D.C.: Inst. for International Economics.

Colby Saliba, Bonnie, 1987. Do Water Markets "Work"? Market Transfers and Trade-Offs in the Southwestern States Water Resources Research 23(7): 1113-22.

Frederick, K.D. 1993. "Climate Change Impacts on Water Resources and Possible Responses in the MINK Region," Climatic Change, 24:83-115.

Gates, T. K., J. P. Burkhalter, J. W. Labadie, J. C. Valliant and I. Broner. 2002. Monitoring and Modeling Flow and Salt Transport in a Salinity-Threatened Irrigated Valley. Journal of
Irrigation and Drainage Engineering, 128(2):87-99.

Hearne, R. and K.W. Easter. 1997. "The Economic and Financial Gains from Water Markets in Chile." Agricultural Economics. 15:187-199.

Houk, E.E; M. Frasier, E. Schuck. 2006. The Agricultural Impacts of Irrigation Induced
Waterlogging And Soil Salinity In The Arkansas Basin. Ag. Water Manag. 85(1):175-183.

Hurd, B.H., J.M. Callaway, J.B. Smith, and P. Kirshen. 1999a. Economic Effects of Climate Change on U.S. Water Resources, in The Impact of Climate Change on the United States Economy, Robert Mendelsohn and James E. Neumann (eds.), Cambridge University Press, Cambridge.

Lettenmaier, D.P. and D.P. Sheer. 1991. "Climatic Sensitivity of California Water Resources." Journal of Water Resources Planning and Management. 117: 108-125.

Lettenmaier, D.P., K.L. Brettmann, L.W. Vail, S.B. Yabusaki, and M.J. Scott. 1993. "Sensitivity of Pacific Northwest Water Resources to Global Warming," Water Resources Research, 26:69-86.
Scheierling, S. M., R. A. Young, and G. E. Cardon. 2006. Public subsidies for water-conserving irrigation investments: Hydrologic, agronomic, and economic assessment, Water Resour. Res., 42, W03428, doi:10.1029/2004WR003809.
Schneekloth, J.P., N.L. Klocke, G.W. Hergert, D.L. Martin and R.T. Clark. 1991. Crop rotations with full and limited irrigation and dryland management. Trans. of the ASAE. 34(6):2372-2380.

Shani, U., A. Ben-Gal, E. Tripler and L. M. Dudley. 2006. Plant Response to the Soil Environment: An Analytical Model Integrating Yield, Water, Soil Type and Salinity. Water Resources Res. Vol. 43, No. 8, W08418 10.1029/2006WR005313.

Triana, E., J W. Labadie and T. K. Gates. 2005. Combining a River Basin Network Flow Model and Artificial Neural Networks for Salinity Control in an Irrigated Valley. In: R. Walton (ed), Proceedings of the 2005 World Water and Environmental Resources Congress, May 15-19, 2005, Anchorage, Alaska; American Society of Civil Engineers, Reston, VA.

Vaux, H.J. and R.E. Howitt. 1984. "Managing Water Scarcity: An Evaluation of Interregional Transfers." Water Resources Research. 20: 785-792.

Walker, W. R. and S. Ivans. 2006. The NRCS Intake Families for Furrow Irrigation -- Old and New. Proceedings of the World Environmental and Water Resources Congress, May 21-25, 2006, Omaha, Nebraska

Walker, W. R., C. Prestwich, and T. Spofford. 2006. Development of the Revised USDA-NRCS Intake Families for Surface Irrigation. J. Agricultural Water Management 85(1):157-164.

Ward, F.A., R. Young, R. Lacewell, J. P. King, M. Frasier, J. T. McGuckin, C. DuMars, J. Booker, J. Ellis, R. Srinivasan. 2001. Institutional Adjustments for Coping with Prolonged and Severe Drought in the Rio Grande Basin. New Mexico Water Resources Research Institute, Technical Report 317, Las Cruces, New Mexico.

Wittler, J.M., G. E. Cardon , T. K. Gates, C. A. Cooper and P. L. Sutherland. 2006. Calibration of Electromagnetic Induction for Regional Assessment of Soil Water Salinity in an Irrigated Valley. Journal of Irrigation and Drainage Engineering 132(5):436-444.

Attachments

Land Grant Participating States/Institutions

AR, AZ, CA, CO, FL, ID, KS, LA, MI, MO, ND, NE, NM, NV, RI, TX, UT, VA, WA, WY

Non Land Grant Participating States/Institutions

NOAA, Texas Tech University, University of Northern Colorado, USDA-ARS Northern Great Plains Research Lab, USDA/ERS