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Economics and Inter-Disciplinary Research: California’s Delta Problems. Richard Howitt AERO Conference, UC Davis October 11 2007. Information Needs for Inter-Disciplinary studies. Agricultural &Resource Economics research is driven by public policy questions

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Economics and inter disciplinary research california s delta problems

Economics and Inter-Disciplinary Research: California’s Delta Problems

Richard Howitt

AERO Conference, UC Davis

October 11 2007


Information needs for inter disciplinary studies
Information Needs for Inter-Disciplinary studies Delta Problems

  • Agricultural &Resource Economics research is driven by public policy questions

  • Many agricultural public policy problems have environmental motivation

  • Linkage between data sets from different disciplines is neccessary

  • Visualization of time and space relationships between environmental and economic processes

  • GIS as an integration mechanism


The delta as critical water supply infrastructure
The Delta as Critical Water Supply Infrastructure Delta Problems

  • Water supply to 23 million

  • 50% annual runoff of California, 40% surface area

  • 7.5 MAF export/year

  • 1800 in-Delta diversions

  • 250 ag discharge sites

  • 1100 miles of levees


The problem
The Problem: Delta Problems

  • The Delta is a dynamic landscape undergoing significant change at multiple scales

  • There is a high probability that abrupt change will take place in the next 50 years, disrupting ecosystem services

  • All current planning efforts predicated on the flawed assumption that the Delta is, or can be made to be, a fixed hydrologic, ecologic and physical landscape


Current focus on levees
Current Focus on Levees Delta Problems


Impacts of levee failures
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

June 29


Impacts of levee failures1
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

Day 2


Impacts of levee failures2
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

Day 14


Impacts of levee failures3
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

Day 31


Impacts of levee failures4
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

Day 45


Impacts of levee failures5
Impacts of Levee Failures Delta Problems

  • Draws salt water into the Delta: Big Gulp

  • Changes tidal prism, leading to further intrusion of salt water into Delta

  • Shuts down the CVP, SWP and Contra Costa Canal

  • Potential to disrupt all environmental services

Day 62

C. Schmutte


A system undergoing constant rapid change
A System Undergoing Constant, Rapid Change Delta Problems

  • Subsidence

  • Sea Level

  • Seismicity

  • Sedimentation

  • Climate Change

  • Hydrology

  • Land Use

  • Invasive Species


The DWR Disaster Scenario: 6.5 magnitude quake on the Hayward-Calaveras Fault

L. Snow

  • 16 Islands fill

  • Shut down of all water projects

  • Loss of 2 major highways, railroad, gas and oil pipelines, 2 ports

  • 85,000 acres farmland lost, 3000+ homes

  • Permanent loss of some islands

  • Increased dependence on low-quality San Joaquin Water

  • 5-year costs exceed $40B (low)


Abrupt change in 50 years remote or real
Abrupt Change in 50 Years: Remote or Real? Hayward-Calaveras Fault

  • P = 1-[1-1/T]n

  • 100-year earthquake = .40

  • 100-year flood event = .40

  • 100-year earthquake AND flood = .16

  • 100-year earthquake OR flood = .64

It is a 2-in-3 probability that abrupt change will occur in the Delta in the next 50 years


Agricultural land use
Agricultural Land Use Hayward-Calaveras Fault


Environmental islands 5 ag
Environmental Islands (<5%ag) Hayward-Calaveras Fault


Base land and profits
% Base land and profits Hayward-Calaveras Fault


Ag production model
Ag Production Model Hayward-Calaveras Fault

Revenue

Cost

pjg: Selling price of crop j in region g

aijg, gijg: Cost function parameters

j: Crop index

g: Region index

i: Input index


Yield reduction by salinity
Yield Reduction by Salinity Hayward-Calaveras Fault

(Salinity indirectly measured as Electrical Conductivity, EC)


Sacramento san joaquin river delta
Sacramento-San Joaquin Hayward-Calaveras FaultRiver Delta

Peripheral

Canal


Changes in current delta planning
Changes in Current Delta Planning Hayward-Calaveras Fault

  • Need a dynamic approach since we are faced with dynamic exogenous drivers.

  • Need trade-offs rather than consensus.

  • Mitigation based on opportunity cost & environmental costs.

  • The “Beneficiary pays” principle can be implemented through user financing.

  • Project sizing and financing must be decided simultaneously

  • One cost allocation method is Ramsey pricing.


Jones tract economics
Jones Tract Economics Hayward-Calaveras Fault

  • June 3rd 2004 flooding event during spring tide

  • 11,000 acre island, subsided to 10-12 ft. below MSL

  • Single breach, but near loss of other levees

  • $44 million for levee repair and pump-out

  • Total land purchase value $28 million

  • Shut-down of water supply infrastructure


Some delta management alternatives
Some Delta Management Alternatives Hayward-Calaveras Fault

  • Fluctuating Salinity & Year Round Exports

    • New Peripheral Canal

    • Island Aqueduct

  • Reduced Exports

    • Opportunistic exports

    • Gradually Abandon the Delta levees


Triangulating a delta solution
Triangulating a Delta Solution Hayward-Calaveras Fault

Abandoned Delta

  • Subsidence

  • Sea Level Rise

  • Seismicity

  • Runoff Change

  • Invasive Species

  • Urbanization/Population

  • Water Supply

  • Farming

  • Native Biodiversity

  • Transportation

  • Recreation

  • Runoff Disposal

Solution Area

Restored Delta

Fortress Delta


Book: Hayward-Calaveras Fault

“Envisioning Futures for the Sacramento-San Joaquin Delta”

Public Policy Research Institute, San Francisco

http://www.ppic.org/main/publication.asp?i=671


A spatial econometric approach to estimation of salinity effects
A Spatial Econometric Approach to Estimation of Salinity Effects

  • Three cross section field level GIS overlays of crop, soil class, salinity depth and concentration- About 45,000 fields

  • Estimate the extensive margin adjustment to salinity

  • Fit a multivariate logit model to estimate the probability of observing a given crop on a field

  • Calculate the marginal probability as a function of salinity

  • Use cost and return data to calculate the marginal salinity cost


Conclusions
Conclusions Effects

  • Agricultural policy research will increasingly include environmental goals

  • Models and data needs will shift toward more integrated physical data

  • Online data sets with spatial and temporal referencing will be required

  • Primary economic data is getting more costly, and scarcer?

  • Geo-referenced physical data is getting much more available and cheaper

  • Specialized agricultural and resource libraries will adapt- possibly as regionally focused nodes in an integrated information network.


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