Source: COLORADO STATE UNIVERSITY submitted to
WATER POLICY AND MANAGEMENT CHALLENGES IN THE WEST (FROM W1190)
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
NEW
Funding Source
Reporting Frequency
Annual
Accession No.
0220845
Grant No.
(N/A)
Project No.
COL00211B
Proposal No.
(N/A)
Multistate No.
W-2190
Program Code
(N/A)
Project Start Date
Oct 1, 2009
Project End Date
Sep 30, 2014
Grant Year
(N/A)
Project Director
Goemans, C. G.
Recipient Organization
COLORADO STATE UNIVERSITY
(N/A)
FORT COLLINS,CO 80523
Performing Department
Agricultural and Resource Economics
Non Technical Summary
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.
Animal Health Component
40%
Research Effort Categories
Basic
30%
Applied
40%
Developmental
30%
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
1110210301010%
1110399301010%
1120210301010%
1120399301010%
6030210301010%
6030399301010%
6070210301010%
6070399301010%
6090210301010%
6090399301010%
Goals / 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
Project Methods
Estimating Crop-Water Production Functions for Varying Crop Water Application Rates and Water Quality Levels;Publication of Extension Educational Guides for Evaluating Opportunities for, and Managing, Deficit Irrigation Strategies;Modeling Surface Water and Storage Opportunities in Arid Agricultural Regions; Role of Adaptation in Reducing the Impacts of Climate Change and Drought on Water and Agriculture;Assess alternative water quantity and quality markets

Progress 01/01/12 to 12/31/12

Outputs
OUTPUTS: In conjunction with the Colorado Water Conservation Board and Colorado Department of Agriculture conducted survey of agricultural producers on impacts of 2011 regional drought. Results were disseminated via a series of presentations to stakeholders, national conferences, press releases, and a final report. Developed EDMP model of Colorado Agriculture used to model impacts of 2011 regional drought on Colorado producers.Results were disseminated via a series of presentations to stakeholders, national conferences, press releases, and a final report. Conducted experiments to exam the impact on residential water demand of alternative pricing structures and providing households with information on their water use. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Survey of Colorado producers will allow state regulators to design better drought management programs. The survey highlighted which sectors of the agricultural community were hit hardest in 2011. Survey and EDMP modelling efforts led to two follow up grants from the CWCB and CDA to extend the drought impact study into 2012 and expand the geographic scope to all of Colorado. Results from the experiment will help water utilities better understand household responsiveness to changes rate structure changes, both type and levels.

Publications

  • Smith, M., M. Arabi, and C. Goemans. 2012. Quantifying the Relationship between Irrigation Activities and Size of Wetlands in a Northern Colorado Watershed. Colorado Water, forthcoming.
  • Pritchett, J., C. Goemans, and J. Thorvaldson. 2012. Water as a Crop: Are South Platte Farmers Willing to Participate in Innovative Leasing Arrangements Colorado Water, Volume 28, Issue 5, pages 5-9.
  • Gunter, A., C. Goemans, J. Pritchett, and D. Thilmany. 2012. The Economic Impact of the 2011 Drought on Southern Colorado: A combined input-output and EDMP analysis. Colorado Water Conservation Board Project Report.
  • Nelson, R., J. Pritchett and C. Goemans. 2012. Survey Summary: Farm and Ranch Managers Responses to the 2011 Drought. Colorado Water Conservation Board Project Report.
  • DiNatale, K., A. Hickman, C. Goemans, S. Kroll, H. Thompson, and B. Dereume. 2012. Water Partnerships: An Evaluation of Alternative Agricultural Water Transfer Methods in the South Platte Basin. Colorado Water Conservation Board Project Report.
  • Cherry, T.L., S. Kallbekken and S. Kroll. 2012. The Acceptability of Efficiency-enhancing Environmental Taxes, Subsidies and Regulation: An Experimental Investigation, Environmental Science and Policy 2012, 16/1, 90-96.
  • Loomis, J. 2012. Comparing Households Total Economic Values and Recreation Value of Instream Flow in an Urban River. Journal of Environmental Economics and Policy 1(1): 5-17.
  • Goemans, C., M. Costanigro, and J. Stone. 2012. The Interaction of Water Restriction and Pricing Policies: Econometric, Managerial, and Distributional Implications. Journal of Natural Resources Policy Research, Volume 4, Issue 1, pages 61-77.


Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: Water management is becoming increasingly difficult and controversial in the midst of growing demand for water and increased variability in supplies. Now more than ever being able to design appropriate policies and predict their effectiveness is critical. Our research efforts this year focused on three areas related to the successful design and creation of water management policies: (1) data collection; (2) understanding the impact of public perception on policy effectiveness and feasibility; and (3) modeling efforts to predict the impact of risk and spatial layout on policy effectiveness. Access to the appropriate data is a critical requirement for evaluating the effectiveness of policy on water use. Over the past year project team members surveyed Colorado utilities to determine existing data collection efforts and priority research information needs. Survey findings were presented to the Colorado Water Conservation Board (CWCB) and in a workshop with water professionals. Findings were incorporated into project team member work with the CWCB (as part of the HB-1051 Advisory Group and the CWCB Technical Advisory Group) to develop utility data reporting requirements for the state of Colorado (developed reported tool outlining specific data utilities must report each year). Public perception of policies has long been recognized as a critical determinant of policy adoption and effectiveness. In an effort to provide additional insight into this process, project team members conducted laboratory economic experiments to examine the potential long-term success of different climate change policies. Experiments were also conducted to examine what affects public acceptability of alternative policy and management institutions. The Project Team worked in conjunction with members of the Department of Wildlife and NCWCD to develop a dynamic-stochastic Mussel Management Decision Support tool for the Colorado-Big Thompson System. The model, available online at: http://dare.colostate.edu/tools/cbtmussels.aspx) evaluates the effectiveness (both physically and economically) of preventative management efforts to stop the spread of mussels. The model developed was a core component of a Master's Thesis, which received the WAEA Outstanding Thesis Award for 2011. Modeling strategies were presented to the Three Lakes Water Quality Taskforce, including representatives from the EPA, BOR, NCWCD, USGS. In addition to several publications in academic and extension journals, elements of the above research was also disseminated via conference presentations (e.g., Innovative Water Transfers Workshop and AWWA ), blog posts (e.g., Aguanomics), and department seminars (e.g., University of Wyoming). A paper that one of the project team members coauthored with a Norwegian environmental economist and published in an academic journal, was recognized by the Norwegian Economists Association as "new published international research of high quality," and will be featured in a newsletter for the general public in 2012. PARTICIPANTS: Not relevant to this project. TARGET AUDIENCES: Not relevant to this project. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
The development of utility data reporting requirements will lead to more consistent and comprehensive data collection from utilities (required for the next 10 years) which will lead to (a) better statewide planning and (b) enhanced ability to disseminate water conservation research specific to individual utility needs. Findings from the survey of Colorado Water Utilities was used by state regulators to help inform which conservation research projects should be funded over the next few years. Results from the Public Perception and Feasibility studies will guide political decision-makers in thinking about how to make efficiency-enhancing policies more attractive and feasible, even if that means that sometimes the first-best policy as recommended by economists has to be foregone in order to implement a less efficient, but more feasible policy.We observed that success of these policies depends, more than expected, on the perceived probability of negative effects from climate change. Findings also suggest that incentive-based policies traditionally endorsed by economists are, independent of efficiency considerations, less supported than expected. Results from the Mussels DSS research suggest that reservoirs with very high levels of boat visitation are at risk even if their waters are considered to be of low ecological risk for invasion (e.g., Colorado). Findings from the project also increase awareness of the need for spatial models of this type which account for propagule pressure from both boaters and upstream flows. This awareness lead to a research grant from Colorado Water Institute to incorporate adaptive management into model. It also lead to continued collaboration with Department of Wildlife to estimate boater movement throughout Colorado.

Publications

  • Viscusi, W.K., Phillips, O.R., and Kroll, S. 2011. "Risky Investment Decisions: How Are Individuals Influenced by Their Groups" Journal of Risk and Uncertainty, 43/2, 81-106.
  • Kallbekken, S., Kroll, S., and Cherry, T.L. 2011. "Do You Not Like Pigou, or Do You Not Understand Him Tax Aversion and Revenue Recycling in the Lab," Journal of the Environmental Economics and Management, 62/1, 53-64.
  • Thorvaldson, J., Pritchett, J. and Goemans, C., 2010. Western Households Water Knowledge, Preferences, and Willingness to Pay. Canadian Journal of Agricultural Economics, V. 58: Issue 4, P. 497-514. December.
  • Hurd, B., Goemans, C., Frisvold, G., and Stone, J. 2011. "Estimated Impacts of Climate Change Legislation on New Mexico Agriculture.", NM State AES Bulletin 801.
  • Santiago, L. and Loomis, J. 2011. Testing Differences in Estimation of River Recreation Benefits for International and Domestic Tourists as a Function of Single versus Multiple-Destination Trips. Journal of Hospitality Marketing & Management 20: 143-165.
  • Costanigro, M., Kroll, S., Thilmany, D., and Nurse, G. 2011. "Local and Organic: An In-Store Evaluation of Labels for Apples," Agribusiness: an International Journal, 27/4, 465-477.


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: Statewide population in Colorado is forecasted to more than double over the next 50 years. Most of this growth is expected to occur along Colorado's Front Range. The state of Colorado is currently trying to determine how best to meet the water needs of future residents. Water conservation and the reallocation of water from Ag to municipal uses are the two most likely candidates for meeting new demands. Project activities focused on these issues, specifically: 1. Developing a better understanding of how to successfully design alternative market-based instruments which allow for the reallocation of water from ag to urban uses without the negative side effects associated with traditional "buy and dry" methods. 2. Working with Colorado water officials and utilities to design a water conservation research "road map" that helps guide the allocation of future research funds (by focusing on utility information needs) and identifies priority data collections needs. The following is a sample of outputs associated with each of these areas and outputs from other W1190 related projects: 1.A. Designed computerized water rights and water market experiment to test impact of different institutional settings on the effectiveness of water markets and impacts on agriculture. Experiment was run several times including with test subjects (spring 2010), irrigators (08/2010), and state officials (05/2010). The experiment was also run each semester in class to enhance students understanding of water markets (Spring and Fall 2010). 1.B. (conference presentation) The Impact of Leasing on Water Rights Markets: An Experimental Analysis (with S. Kroll), 2010 S.P. Forum, Longmont, CO, 9/2010 1.C. Participated in CWCB Alternative Agricultural Transfer Method Programs Workshop (2/2010). Stakeholder workshop used to provide guidance for State funding of Alt-to-Ag project funding. 2.A. Conducted one-on-one surveys with CWCB officials and various large utilities across the Front Range. Collected information on priority information needs of the utilities and which data they currently collect (sum/fall 2010). 2.B (conference presentation) Feasibility Study to Assess the Potential of Urban Water Conservation to Meet Future Demand, CO WaterWise 2nd Annual Conservation Workshop, Denver, CO, 9/2010 2.C Member of Colorado Water Conservation Board (CWCB) Technical Advisory Group. Group advises CWCB on research needs, evaluates technical competency of CWCB research projects, and makes policy recommendations Other Outputs: -(outreach presentation) Estimating the Cost Effectiveness of Water Conservation Programs, Colorado Water Institute, Denver, CO, 11/2010 -(outreach presentation) Adaptive Management of Zebra Mussels in Colorado, Colorado Water Institute, Denver, CO, 11/2010 -(conference presentation) Water in the West: Current Use and Future Challenges, 13th Annual Farmers Cooperatives Conference, Broomfield, CO, 12/2010 - Member of team that conducted an review of USDA-RMA sponsored UNL project: Enhancing Irrigation Management Tools and Developing a Decision Support System for Managing Limited Irrigation Supplies for the High Plains - Organizer and Host of W2190 Annual Project Meeting PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Nothing significant to report during this reporting period. PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Results from the experimental water market suggest that while the introduction of active water leasing markets will result in more water in agriculture, it may make irrigators worse off. This is especially the case if information about past transactions is not publicly available. These results directly address questions/concerns raised by irrigators about participating in water leasing at the start of the project. These results were communicated to state officials, who indicated they will incorporate these findings into future discussions regarding the design of alternative institutions. The results provide insight into why many in irrigated agriculture are reluctant to participate in alternatives to traditional water rights transfers. The water market program was also used as a learning tool on several different occasions to help students, irrigators, and state officials better understand how water markets work and the decision process for those involved. Evidence of the impact of the learning exercise includes: comments from one participant who indicated that it contributed to a change in their thinking about whether or not to sell their water rights and student course evaluations which indicated it changed their thinking about the reallocation of water using markets. In terms of research, the results have provided new insight into how water rights and water leasing markets interact. This thinking is being incorporated into graduate student research projects.

Publications

  • J. Stone and C. Goemans. 2010. The Complexities of Conservation Research Needed to Incorporate Conservation Savings Into Utility Water Supply Planning, Colorado Water, v. 27, Issue 4
  • Brian Hurd, Goemans, C., Frisvold, G., Stone, J. 2010. Impacts of Climate Change Legislation on Agriculture in the Rocky Mountain States of Arizona, Colorado and New Mexico, American Farmland Trust Report, April 2010, http://www.farmland.org/documents/AFTRM- SWRegionSummaryReport.pdf
  • Marco Costanigro, J. McCluskey, C. Goemans. 2010. The Economics of Nested Names: Name Specificity, Reputations, and Price Premia, American Journal of Agricultural Economics 2010, doi: 10.1093/ajae/aaq065
  • Thorvaldson, J., Pritchett, J. and Goemans, C. 2010. Western Households Water Knowledge: Preferences, and Willingness to Pay. Canadian Journal of Agricultural Economics, V. 58: Issue 4, P. 497-514
  • C. Goemans, Kroll, S., and DiNatale, K. 2010. Alternatives to Permanent Water Tranfers Using the Farmers Reservoir and Irrigation Company (FRICO) System, (2010), Colorado Water, V. 27, Issue 1
  • C. Thomas, Goemans, C., Bond, C. 2010. The Costs and Benefits of Preventative Management for Zebra and Quagga Mussels, Colorado Water, V.27, Issue 5
  • C. Goemans and S. Kroll. 2010. Water Markets Alternative For Permanent Transfers, CSU College of Ag Newsletter, Fall 2010