Programme  Poster session 1  abstract 704

Hydro-economic Models for Integrated Water Resource Management

Author(s): Julien J. Harou, Manuel Pulido-Velazquez, David E. Rosenberg, Josue Medellin-Azuara, Jay R. Lund

Keyword(s): Hydro-economic models, IWRM, efficient allocation, economic value of water

Poster: abs704_poster.pdf
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Session: Poster session 1
AbstractHydroeconomic models help water managers design, operate and expand water resource systems efficiently and in

accord with explicitly represented societal values and priorities. These models have emerged as a privileged tool for

investigating and fostering integrated management of water resources. The cross-fertilization of engineering and

economics allows more realistic representation within mathematical models of how water is managed in practice and

how management could be improved. Hydroeconomic models are distinguished by a solution-oriented and

integrated approach. The discipline’s central idea is that water demands are not fixed requirements but rather

functions where different quantities of water at different times have varying total and marginal values. In this

approach water management is driven by the economic value of water rather than by (or in addition to) other

requirements or priorities. Economic concepts used include: economic water demand, value of environmental

services, consumer surplus, willingness-to-pay, and supply-side economics. Hydroeconomic models are built with

diverse aims, formulations, levels of integration, spatial and temporal scales, and solution techniques. This paper

surveys several hydroeconomic applications from the United States, Jordan, Spain, and Mexico. Policy insights and

management practices revealed by the applications are discussed to show how such modeling efforts promote

integrated water resource management. Hydroeconomic models go well beyond minimizing costs and maximizing

profits, they provide a common framework through which the value of all water services can be considered and used

to direct system planning and operation.

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