Optimal Allocation of Water and Land Resources at the Catchment Scale

Optimizing water and land use patterns is a key task of governments both in developing and developed countries. Recent years have seen a paradigm shift in the way water resources are managed. The new paradigm of integrated water resources management recognizes multiple objectives: Environmental sustainability, economic efficiency and social equity. Moreover, the economic and environmental dimensions of water resources management are key elements of the EU’s Water Framework Directive.
The economic aspects of use and allocation of water resources has until now mainly been investigated through coupling of macroeconomic models with simplified hydrological models, often neglecting the important temporal and/or spatially variability of the resource. Spatially distributed hydrological and ecosystem modelling offers new opportunities to map water related externalities at the catchment scale. Remote sensing and GIS techniques enable a detailed spatial mapping of input parameter fields.
This project will combine existing water resources simulation models, representing both the temporal and spatial variability of the water availability, with economic models in a catchment-scale simulation-optimization tool for science-based decision support. Its focus is the identification of optimal water and land allocation patterns. Both Pareto-optimal and economic tradeoff methods will be analyzed.
The combined model will describe the major water and land-use activities in the catchment (irrigation agriculture, industry, hydropower generation etc.) including their physical and socioeconomic constraints, and the project will identify the appropriate extent of economic interactions to be internalized in the economic model in order for it to reflect the essential economic developments in the basin. Price elasticities, sensitivety to varying marked prices and sensitivity of the results to uncertainty in the input parameters will be investigated.
The potential of agent-based simulation approaches to capture second-round effects of water allocation decisions in the economy may be explored. The simulation-optimization tool will enable new opportunities for cost benefit analysis of water and land management decisions. The tool will be applied to and tested on studies from Denmark, Europe and the developing world.