Risk-aversion in water allocation policies in semi-arid regions.(Research Paper)

INTRODUCTION

One-fifth of the world's population lack access to adequate, clean water supplies. This threatens national security as well as prosperity, prompting Wally N'Dow, a Secretary-General of the United Nations Conference on Human Settlements to predict '... a shift from oil to water as the cause of great conflicts between nations and peoples' (U.S. Water News Online, 1996). Therefore, water systems are a critical infrastructure. Increases in supplies of water are limited because easily accessible sources are invariably exploited first (Brooks, 1997) causing underutilized water sources to grow increasingly difficult and expensive to develop and use in many areas of the world. While supply management approaches can help in some areas, they cannot indefinitely relieve the pressure on the world's water supply in the future (Postel, 1992). This is particularly true in areas of water scarcity (Al-Ibrahim, 1990). For example Hamdy et al. (1995) classified Mediterranean countries into three groups according to future water problems: (1) countries where water supplies are currently sufficient, (2) semi-arid countries with currently sufficient but declining resources relative to demand and (3) arid countries already facing water shortage crises. Semi-arid regions are characterized by long, hot, dry summers and short, mild, wet winters. In some locations tourism is also highest in the summer, increasing the population by 50-100%. Although these countries can currently meet their overall water needs they face periods of shortages due to high demand and inconsistent supply. Total demand can only be met by means such as over-pumping aquifers, which allows salt-water intrusion and pollution of aquifers (Brooks, 1997). These semi-arid countries cannot sustain significant increases in per capita withdrawals or economic growth with their current water management and can only partially meet their current water needs.

This study models water in a semi-arid region due to the critical need in these areas for improved water resource management and opportunities to avoid crisis conditions. Having increased available supply through water development projects as much as possible, water managers in these regions are forced to also include demand in their policies. Three forms of demand management are used to better match demand and supply: total demand management, load management and allocation. Total demand management reduces water needs. The economies of semi-arid regions are often dominated by high water uses (e.g. agriculture) and economic forces such as growth that prevent or severely limit reductions in total demand. Load management changes the pattern of water supply, its use or both over time to match periods of high demand with periods of high supply. Allocation of available supplies occurs when water managers cannot or choose to not meet all current demands and distribute the available supply among users. Allocation decisions divide scarce resources among competing uses to meet various social, economic or political goals (Stiles, 1997). Allocation is often the primary tool of water managers in semi-arid regions (Haten-Moussallen et al., 1999).

The current work combines modelling with the system dynamics methodology and an engagement with water resource decision-makers in a semi-arid region. Applying a rigorous modelling methodology in a descriptive study allowed the specification and testing of policies used in practice. In contrast to water resource management models that focus on supply characteristics such as variability (e.g. Wilchfort and Lund, 1997) the current work uses a computer simulation model to focus on policies that incorporate demand into decisions. Understanding these policies is critical to understanding the performance of the water infrastructure system. Modelling the actual policies of practitioners allows the investigation of their impacts on performance and changes that can potentially improve system performance.

WATER ALLOCATION POLICIES IN SEMI-ARID REGIONS

Water managers in semi-arid regions face the difficult task of developing and implementing allocation policies that will simultaneously fulfil current demand and save adequate supplies to provide continuity of supply during droughts. The underlying goal of this second objective is to translate an inherently uncertain supply into the predictable and dependable series of releases from water storage that users need. To meet these goals, allocation policies must strike a balance between how much water should be released in years of plentiful supply and how much should be saved for drier years. Improving the allocation policies used by managers requires an understanding of at least two issues: (1) how managers use the information available to them to develop expectations of future supply and to set allocations and (2) how those decisions impact fulfilment of current demand and vulnerability to future drought conditions. Access to managers of the water system studied provided rich data concerning the information, parameters and processes used to allocate limited water resources. This allowed the modelling and analysis of an important aspect of water resource management with a depth and richness rarely possible.

The Mediterranean island of Cyprus is an example of a semi-arid country where water allocation policies have important impacts. Cyprus experiences water shortages but has met water demand primarily through water supply management (Hamdy et al., 1995). In years of above-average rainfall existing and new supplies are expected to provide enough water to meet demand. However droughts are common on Cyprus, typically occurring every 2-4 years (Haten-Moussallen et al., 1999). Being aware of this pattern, Cypriot water managers plan for droughts when allocating water. Effective allocation policies for Cyprus are those that use water storage to de-couple the highly variable and relatively unpredictable inflows from the desired reliable and consistent outflows used to fill current and future demands.

Developing water allocation policies in semiarid regions such as Cyprus is difficult for several reasons. The interactions of the water supply system, water manager decisions, political and social objectives and priorities, and demand centres are linked in a dynamic, nonlinear and closed system in which information about the condition of the system is fed back to managers for use in controlling the system. These factors create a complex decision environment for water managers where system conditions and performance evolve over many years and in response to past, present and future conditions and decisions. For example, allocation decisions for some crops must be made before most of the rain in a given season has fallen. Water managers are therefore forced to predict water supplies during the rest of the season to allocate water in the current season and possibly withhold supplies to meet long-term needs. In addition, the year following a drought year is often a time of restricted water supply as managers replenish storage. These projections and delays distort information that is used in decision-making and cause behaviour to vary from optimal behaviour. This has caused economic approaches to the design of water allocation policies at the same location studied here to generate results that are inconsistent with actual behaviour and confounding to researchers (Haten-Moussallen et al., 1999). In contrast, the current approach explicitly models the dynamic complexity of water allocation decision-making and its impacts on water resource system performance.

A WATER ALLOCATION MODEL

A dynamic simulation model of the interactions of water allocation policies and a water resource system, including managerial decision-making, information flows and physical system responses to allocation policies was developed. The model captures the primary water system components, managerial policies and their interactions that mimic the research site to generate behaviour modes, shapes of behaviour over time, so that actual and …