Brief Summary of Minutes of Annual Meeting

This is the second annual meeting of W2190, held on October 14-15, 2010, in Fort Collins, CO. Officers for the past year: Chair - Chris Goemans, Colorado; Vice-Chair - Nick Brozovic, Illinois; Secretary - Bob Golden. (Bob Hearne took down initial minutes for the Fort Collins meeting; Kristi Hansen finalized them.) 10/14/10 Morning 1. Introductions by Chris Goemans (meeting host) and Nick Brozovic. 2. Neil Hansen (Soils and Crop Sciences CSU) gave a presentation entitled, "Water-Conserving Cropping Systems: Lower South Platte Irrigation Research and Demonstration Project." This presentation was consistent with W2190 Objective 1: Develop farm-level irrigation strategies to address water quantity and quality problems. Neil's research focuses on deficit irrigation. There are many ag-to-urban water transfers on the Front Range of Colorado. These have historically 'buy-n-dry transactions,' where verification of water savings is easy because the field of the selling farmer is dry. If there were a way to partially irrigate profitably, and if water savings could still be credibly verified, then agriculture could continue while farmers were simultaneously transferring water to cities. Neils goal is to find methods (rotation, limited irrigation systems, partial irrigation systems) that will reduce water consumption by 20-40% while maintaining profitability. An additional constraint is that the solution must be cost-effective and use existing technology. Neil's presentation prompted discussion of a number of issues: - Selling water as an alternative crop (leases); - Whether water is risk-increasing or risk-decreasing (see Peterson AJAE 2005). - Whether the legal structure is in place in Colorado and elsewhere for transferring conserved water (salvage rights); - The importance of incorporating timing into irrigation models (whether shortage risk is at start or end of irrigation season affects cropping decisions and the likely success of the alternative irrigation regimes that Neil discussed in his presentation); - Whether dry-year options are a likely outcome (cities really prefer to own water rights rather than lease, or sign dry-year options); - Resilient institutions, for example, the potential for aggregation on the seller side to increase the bargaining power of farmers, as a water co-op on the South Platte is currently doing; - How water transfers change the hydrograph, even if the same amount of water ends up in the same place at the end of the year; - Whether the adoption hurdle for deficit irrigation (and the associated substitution of low-skilled labor for management) is feasible. 3. Fen Hunt (NIFA, USDA) called in briefly from DC. Fen fielded questions about the CSREES to NIFA reorganization. She is now in the Climate Change, Energy, and Environment group. 4. Nick Brozovic thanked the committee members for sending in their state reports. He noted that having the reports prepared in advance of the meeting allows the committee to focus on substantive issues. He also iterated the importance of reporting the multistate and multidisciplinary research being undertaken and the necessity of attaching milestones, outputs, and impacts to our objectives. 5. Mike Harrington (CSU) provided us with news from the Western AES Directors. Mike is now our administrative advisor. (He replaces LeRoy Daugherty.) Mike reviewed the new USDA priorities: Climate Change, Global Food Security, Renewable Energy, Nutrition and Childhood Obesity, and Food Safety. There was discussion of how and where water resources research fits into the new NIFA structure. The RFA this year had fewer programs and more integrated programs, and the amount of AFRI funds available for new awards is significantly lower than previous years. Mike gave a presentation on the definition of impacts (vis-à-vis outcomes) and the importance of demonstrating impacts. His presentation prompted lively discussion on the difficulty of defining and measuring impacts, especially in the short-term. 10/14/10 Afternoon 1. Eric Roon (Program Manager, Western Water Assessment) gave a presentation on ongoing research and opportunities for collaboration at Western Water Assessment (WWA). This presentation was consistent with W2190 Objective 2: Examine regional water-related impacts associated with energy, environmental policy, and climate change. WWA is the NOAA-sponsored Regional Integrated Science and Assessment (RISA) that covers Wyoming, Colorado, Utah. It is based in Boulder, CO. The focus of WWA is to assess risks to climate variability and change. Climate change implies changes in hydrologic cycle. In snowpack dominated systems a warmer future is a challenge. Climate change exacerbates existing stressors, including population growth. WWA likes to bridge science and stakeholder needs. They provide mini-grants to university researchers. Eric expressed their willingness to discuss collaboration possibilities with members of W2190. Eric's presentation prompted discussion of several issues: - How about restricting population growth? Some developers have been required to purchase water rights. - Municipal pricing structures: Block rate pricing is increasingly employed, and pricing based on evapo-transpiration rates is being considered in areas where outdoor water use is a large percentage of residential consumption; - Use of water-saving devices such as automatic sprinkler systems; - Climate literacy seems to be improving. 2. Conference announcements. - Brian Hurd announced that the Universities Council on Water Resources will be holding its annual meeting in Boulder, CO on July12-13, 2010. He suggested that W2190 members could organize a number of sessions, perhaps around the three W2190 objectives. In particular, Brian would like to organize a session on climate change. Bob Hearne wants to organize a session on water policy institutions. - Ariel Dinar announced an upcoming meeting of the International Water Resource Economics Consortium, which is housed at Riverside, CA. The meeting will take place in Banf, Canada, on July 25-27, 2010. The location and dates were selected to coincide with the annual meeting of the Western Agricultural Economics Association. - The Heartland Environmental Resource Workshop will take place in Champaign-Urbana in mid-October. - The American Water Resource Association will meet in Las Cruces, New Mexico on November 7-10, 2011. - The Western Agricultural Economics Association will meet next summer in Banff, Canada on June 29-July 1. 10/15/10, Morning 1. Todd Doherty (Colorado Water Conservation Board) gave a presentation entitled, "The Alternative Agricultural Water Transfer Methods Grant Program." This presentation was consistent with W2190 Objective 3: Investigate alternative water policy and management institutions. The Colorado Water Conservation Board (CWCB) received funding in 2007 from the Colorado State Legislature to explore alternative methods for transferring water from agricultural to urban use. This is a grassroots effort to develop institutions from the ground up rather than passively accepting institutions imposed by the state. The CWCB web site address is http://www.cwcb.state.co. Todd's presentation prompted discussion of several issues : - CWCB has studied the 'super-ditch' concept, whereby a group of ditch companies aggregates to lease water to cities. But the existing super-ditch in the state took five to eight years to develop; will cities wait five to eight years to lease water when they can simply aquire water rights immediately? - Leasebacks to agricultural use (at least until the purchasing municipality is ready to use the water) are common. One problem with leasebacks is that when the land/water right is transferred to municipalities, the seller has difficulty acquiring financing for capital investments. - The magnitude (small or large) of third-party impacts from water transfers and water rights transfers. - Mike Harrington raised the issue of food policy/security. This led to a discussion of the need for better modeling, to better assess what cropping activities are removed from agricultural production, in response to water transfers. Frank Ward suggested the use of Positive Mathematical Programming to equate the marginal values of different cropping activities. 2. Business Meeting. Nick reviewed milestones for 2011. The bottom line is that a number of milestones are done or in advanced progress. A few examples: Nick Brozovi hosted the Heartland Environmental and Resource Economics Conference in Illinois. There will be a special edition on groundwater management in the journal Hydrogeology. Jeff Peterson is working on Ogalla validation. Ray Supalla is working on deficit irrigation crop production. Brian Hurd is editing a special issue on climate change. A special issue on water in the Canadian Journal of Agricultural Economics will be out soon. Next year's reports should include tags on individual activities and outputs indicating the associated W2190 objective. Nick is still waiting for a few more reports for 2010. The location for the 2011 W2190 meeting was selected. Suggestions for 2011 included Boulder, CO (to coincide with UCOWR), Albuquerque, NM (to coincide with AWRA). Reducing travel costs for young researchers was a major consideration during the discussion. It was decided by majority vote that the meeting will be in Las Cruces/El Paso, Texas, in early October, 2011. Ariel Dinar has volunteered to host the 2012 meeting in Riverside, CA. Officers for 2010-2011: Chair - Nick Brozovic, Illinois; Vice-Chair - Dannele Peck, Wyoming; Secretary - Kristi Hansen, Wyoming. State Reports. State reports (5-minute summaries of water issues and research activities in each state) took place during all three sessions, as time permitted. Reports are listed here in alphabetical order by state. California (Arial Dinar): Ariel is looking at developing responses to climate change in the Lower Colorado Basin. He wrote a chapter in the Handbook of Climate Change and Agriculture on how farmers and water users adjust to droughts and climate change. He is also interested in quantitative analysis of institutions. He also has a chapter currently in draft form on the effectiveness of water management institutions. He is estimating an impact of the effectiveness of institutions in California. He may extend this to Colorado River riparian areas and India. Ariels recent paper on California water myths has been very well received. Colorado (Chris Goemans and Mark Eiswerth): Agriculture in Colorado is trying to do well with less water. Markets are great, but there are issues. Chris is using experimental methods to look at trading institutions that are alternatives to permanent water rights markets. There are a few cities on the Front Range and lots of irrigators. Information is NOT symmetric. One finding thus far is that adding leases on top water rights markets is not good for farmers. Further, farmers do not want to cooperate with research that will give cities the lowest price to offer for water. Mark moved from Wisconsin to the University of Northern Colorado (not a land-grant). UNC has a center that facilitates student field work with stakeholders. Mark formed a water resources team at UNC, where there is a strong preference for multidisciplinary projects. The Agricultural Water Conservation Clearinghouse web page (www.agwaterconservation.colostate.edu) was introduced as a useful resource. Contact Reagan Waskom at CSU with comments and questions. It includes FAQs on crop water use. Florida (Ray Huffaker): Ray is working on two Florida water issues. First, the state of Florida is suing BP. John Loomis will work with Ray Huffaker to do contingent valuation and travel cost studies to estimate passive and non-use values. The second issue is climate change. Florida is a peninsula at sea level. Ray Huffaker does not believe in nonstationarity and is looking instead at signal processing. Hawaii (Chennat Gopalakrishnan): Gopal's work is focused on political externalities. He is retiring this year. Meeting participants expressed their gratitude for Gopals many contributions to W2190 and its predecessors over the years. Idaho (Garth Taylor): In addition to the accomplishments and impacts listed in Idaho's state report, Garth is conducting water economics outreach courses, to hydrologists and directors at the Bureau of Reclamation and elsewhere. Illinois (Nick Brozovic): Nick is working on the MODFLOW model of the Republican River. He finds that water trading there reduces water use efficiency and increases return flow. He is also working on California salmon habitat with Cameron Speir (NMFS, also a W2190 member). Kansas (Jeff Peterson): Jeff's water quality trading project is nearing completion. In that work, Jeff uses choice experiments with potential buyers and sellers to determine attribute preferences. He finds that the institutional setup matters a lot. Now, he is using agent-based simulations. Aquifer depletion in western Kansas and Texas on the Ogallala Aquifer is the subject of multi-disciplinary models. Jeff is also looking at climate change impacts and robust institutions. Missouri (Laura McCann): Laura is working on water quality, transactions cost measurement, and institutions. She is interested in Missouri River management and domestic water use, and the use of behavioral economics as a tool for addressing these topics. Nebraska (Ray Supalla): Nebraska's groundwater resource is overappropriated in both the Republican and Platte River Basins. Both basins are closely monitored. Ray is particularly interested in models that show the link between pumping and streamflow, as this would shed light on the conflicts in both basins. Since the primary source of water is groundwater in Nebraska, there is not much concern with questions of where the water is coming from and when. Rather, focus is on Rays water optimizer model (which Ray operates with Chris Thompson and Darrel Martin), and determining the least-cost use of less water. Ray and his colleagues are also working on weather derivatives as a way to hep producers manage risk. (Nebraska farmers do not adopt deficit irrigation practices because crop insurance is not available for farmers who do.) Ray is working with the RMA to develop an appropriate crop insurance instrument. New Mexico (Brian Hurd and Frank Ward): New Mexico committee members have a three-state model of their single basin, fully integrated. They are also working on a two-tiered municipal pricing simulation model. Frank is conducting research on interstate water issues and (optimal) institutional innovation. He is looking at several institutional constraints in particular: the U.S.-Mexico Treaty, the Endangered Species Act, the Rio Grande Compact, and the New Mexico-Texas Compact. Frank is also studying water scarcity on the Euphrates River. Frank had a piece on irrigation efficiencies published in the Proceedings of the National Academy of Science. Brian is working with Chris Goemans and George Frisvold to look at climate change impacts and policies in agriculture. He is also developing a hydro-economic environmental systems (HEES) model with northern New Mexico communities and working to incorporate climate change into the Rio Grande basin model. North Dakota (Bob Hearne): North Dakota is at the infrastructure-building stage of development. There is no irrigation to speak of in North Dakota, due to soil quality. Hot issues in North Dakota include water transfers from the Misouri Basin to Fargo (to protect against 1930's type droughts), fights over water with Manitoba, Devils Lake, Garrison, and Fargo flood diversions. Frank Ward pointed out that Fargos demonstrated ability to acquire water when necessary and redirect it around Fargo during flooding is a good example of a resilient institution. Bob continues to work on the efficiency of local drainage districts and international basin management with Manitoba. Texas (Ari Michelson and Girisha Ganjegunte): Ron Lacewell sends his regrets. Bioenergy in Texas, particularly feedstocks, is an expanding industry. Some examples of the many research projects underway in Texas by committee members are research on the use of brackish water and algae to produce jet fuel and the development of a salinity drainage function on the Rio Grande project. A four-state Rio Grande salinity coalition has convened, to assess environmental impacts and evaluate alternatives. A large percentage of salinity damages are urban. Better water quality would imply different cropping patterns. Identifying sources of salinity is difficult due to oil and gas well development in region. Ari is participating in the development of the national water census (initiated by the Water Resources Act of 2007). This USGS database will include consumptive use and withdrawals. Ari notes that there is insufficient space in the W2190 state report template for all of Texas publications. Girisha continues his work on soil chemistry (see Texas state report for details). Utah (Grant Cardon): Grant is stepping back from his modeling work to reexamine parameter inputs. (Some of the parameters on salt tolerance from fifty years ago might not be good.) Grant will collaborate with W2190 committee member Girisha (Texas) on remote sensing of mapping extent and severity of saline soils. Progress on mapping continues. Wyoming (Dannele Peck and Kristi Hansen): Dannele has a chapter in Ariel's handbook on climate change. She uses a farm model with uncertain water supply to identify what the most critical uncertainties are, from the perspective of the farmer. Inter-year uncertainty is much more important than longer-term uncertainty. This model has good potential. Farmers in the model have the option of using deficit irrigation, but this alternative is not selected in the optimum unless the model is solved with discrete rather than continuous cropping activities. Continuous crop mixes are less realistic than discrete decisions in acreage, though models tend to use continuous crop mixes. Kristi and Dannele are exploring management strategies to deal with coal-bed methane produced water, which is often but not always of low quality. Kristi is also working on the potential for developing a market for ecosystem services in the Green River Basin (headwaters of the Colorado River Basin),which downstream Colorado River users would pay for best management practices. Before arriving in Wyoming, Kristi worked on water transfers and dry-year options, and hydro-economic modeling, in California.

W2190 Objective 1. Develop farm-level irrigation strategies to address water quantity and quality problems. In Michigan, Bartholic built a water recharge calculator and map for TNC to protect and improve water quantity and quality in the Paw Paw River watershed, helping Coca-Cola with water sustainability practices. Bartholic also received the Outstanding Achievement Award for 2010 from the Renewable Natural Resources Foundation and the State Program Innovation Award from the Environmental Council of States. In Texas, W2190 members' preliminary data indicate that the EMI method is rapid, accurate and significantly less expensive than conventional methods to obtain field scale soil salinity data at a high spatial resolution. Further, the 50 year forecast Texas Region A (northern Texas High Plains) agricultural water use demand model (TAMA) has been revised and updated with the addition of the latest crop ET values and crops. In Utah, Cardon completed research on a unique automated apparatus for screening the salt tolerance of plants, providing a method for choosing drought and salt tolerant species for local and regional conditions. He also completed a research project mapping the extent and severity of soil salinity distribution in the Bear River Basin of Utah. Maps provide baseline input for drought productivity modeling. Further, Cardon also initiated research into refining the calibration between remote electromagnetic measurement of soil bulk conductivity to soil salinity using detailed salt chemistry and speciation in soil solutions. W2190 Objective 2. Examine regional water-related impacts associated with energy, environmental policy, and climate change. In Colorado, Goemans is a member of Colorado Water Conservation Technical Advisory Group, helping to design water use data reporting requirements for the state and estimating potential conservation savings. Colorado project members have also completed stakeholder-requested economic study that supports improvements in lake management and promotes linkages to external stakeholders and clientele. In Florida, Huffaker submitted papers on reservoir sedimentation management and irrigation efficiency to Open Hydrology Journal and Optimal Control, Applications and Methods, respectively. In Illinois, Brozovic worked with hydrologists at the Illinois State Water Survey to develop a methodology to assess the sustainability of groundwater use in McHenry County, Illinois. He and collaborators in agricultural economics and civil engineering modeled the economic and environmental impacts of alternate groundwater management policies in Nebraska. Brozovi and Shahnila Islam undertook a hedonic analysis of the value of groundwater in irrigation in Chase County, Nebraska. Brozovic, Speir (NMFS), and others also analyzed streamflow and habitat impacts of seasonal agricultural groundwater pumping in California. In Kansas, Peterson developed and ran a micro-simulation model to assess the impacts of alternative institutional rules on market outcomes and performance. He presented results at the 2010 AAEA meeting. Peterson also developed a positive mathematical programming model calibrated to water- and land-use data in the High Plains, to assess the impact of climate change and different water policies on water resources. He also applied ex ante and ex post case study techniques to the study of the impacts of water-use restrictions in the Wet Walnut Creek Intensive Groundwater Use Control Area (IGUCA) in Kansas. In Nebraska, Supalla and Martin initiated a plan for offering weather derivatives to irrigators as a means of covering the risk of water shortages when groundwater supplies are regulated, cooperatively with industry. In New Mexico, Hurd and Ward have conducted an integrated basin analysis for irrigation water conservation subsidies in the Rio Grande Basin. Findings inform the design of irrigation water conservation policies. Further, Hurd, Ward, and others undertook a regional assessment of climate mitigation policies. The assessment linked Colorado, New Mexico, and Arizona in evaluating the economic impacts of proposed legislation. In Texas, an evaluation of irrigated corn from the Ogallala aquifer with the goal of conversion to ethanol resulted in a negative energy balance; more energy is expended in production, transpiration and conversion than is produced. W2190 Objective 3. Investigate alternative water policy and management institutions. In Arizona, Colby and others have undertaken an economic investigation of water transfers, both traditional (permanent) and innovative, focusing on the relative social, economic, environmental and policy effects of the various arrangements. Their efforts have improved the cost-effectiveness and overall performance of voluntary supply reliability arrangements given increased supply variability under climate change. Colbys review of regional water banks, water auctions and dry year option arrangements worldwide has resulted in a list of best management practices for implementing these types of arrangements. Further, three recently completed guidebooks for stakeholders provide practical information for water supply climate change adaptation using water banks, water auctions and dry- year contract. In California, Dinar hosted an International Workshop on Drought in Riverside California, leading to collaboration with drought experts in Australia, South Africa, Spain, and Mexico. He also completed a literature review on drought and climate change institutions, leading to preparation of a book chapter and used as a basis for a research proposal preparation. In Colorado, Goemans and Kroll developed an experimental water rights and water market. Experiment results are being used to develop institutions in Colorado. The market tool is being used in outreach to educate irrigators on potential outcomes. Eiswerth initiated development of a Water Resources Research Team at the University of Northern Colorado, to promote research and outreach linkages with experts at other universities in Colorado and the West. In Hawaii, Gopalakrishnan conducted a comprehensive review and analysis of the allocation of water by Hawaii's water institutions, with special reference to "political externalities". He also completed a detailed case study of a heavily-contested case (Waiahole Ditch, 1997) involving water allocation among multiple stakeholders, focusing on political undercurrents. In North Dakota, Hearne conducted further analysis of the characteristics of efficient water management districts. In particular, he compared stochastic frontier analysis to data envelopment analysis. In New Mexico, Ward has completed an institutional analysis (with applications to New Mexico and to the Balkh Basin in Afghanistan) for evaluating various water shortage sharing arrangements. In Texas, W2190 members performed an analysis of the water markets in the Texas Lower Rio Grande. Results showed that those markets are effective and efficient, given the current property rights regime and existing mechanisms for moving water to higher value uses. In Wyoming, Hansen and Peck have begun to model a hypothetical tradable permits market for coalbed methane by-product water, as a first step toward evaluating management strategies. Hansen has also initiated work to develop a market for ecosystem services in the Green River Basin, to look at ways to improve water quality downstream.

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