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The economic efficiency of water development in Utah, including transfer systems, has seldom been examined, nor has the costs of public policies which result in deviations from efficient allocations. In order that public officials be better informed about water allocations, the present effort examines the efficient allocation of water in time frames up to 2020 under several alternative assumptions and calculates the cost of alternative policies. Using mathematical programming techniques, a computer mode l is developed to determine the supply (marginal cost) and demand (value of marginal product) relationships for agricultural water, given depletions for municipal and industrial (M & I) and wetland requirements. The model maximizes net profit per acre to an average agriculturalist in each of ten study areas in Utah. Proposed inter-basin transfers and their costs are included in supply. The optimal solution gene rated is an efficient allocation, since maximization of net profits occurs only when value of marginal product equals marginal cost. The requirements for M & I water are projected into the future using trending and probable industrial development. An efficient allocation (optimal solution) is generated by the model f or 1965, 1980, 1990, 2000, 2010, and 20 20. The timing of investments in water distribution systems can be determined from these solutions. Using alternative assumptions about policies (minimum inflows to Great Salt Lake and water salvage) several alternative temporal distributions are determined. Additionally, the effect of restrictions on groundwater pumping (present levels of storage must be maintained) are examined. The costs to users in higher supply curves (marginal costs) are approximated by areas between supply curves. In addition, losses to agricultural users from diminished efficient new production can be approximated. The critical factors in large proposed water transfers in Utah appear to be the growth of M & I requirements along the Wasatch Front, particularly in the Jordan River Basin. Sufficient water is available in the Colorado River Basins to provide maximum transfers, full oil shale and power generation development, and efficient agricultural production. Restrictions on groundwater pumping and water salvage in the Jordan River Basin and maintenance of high inflows to Great Salt Lake make transfers necessary sooner. The costs of such restrictions approaches 25 percent of the total investment by agriculture in transfer systems. If no restrictions are made, but investment in these systems occurs now, a loss of foregone returns to alternative investment equal to about 70 percent of the total agricultural investment is incurred by society.
The economic efficiency of water development in Utah, including transfer systems, has seldom been examined, nor has the costs of public policies which result in deviations from efficient allocations. In order that public officials be better informed about water allocations, the present effort examines the efficient allocation of water in time frames up to 2020 under several alternative assumptions and calculates the cost of alternative policies.
Howe and Easter analyze existing evidence on direct and indirect benefits attributable to water, as well as the potential costs of interbasin transfers, and examine feasibility of alternatives. Originally published in 1971
The American West faces many challenges, but none is more important than the challenge of managing its water. This book examines the role that water transfers can play in allocating the region's scarce water resources. It focuses on the variety of third parties, including Native Americans, Hispanic communities, rural communities, and the environment, that can sometimes be harmed when water is moved. The committee presents recommendations to guide states, tribes, and federal agencies toward better regulation. Seven in-depth case studies are presented: Nevada's Carson-Truckee basin, the Colorado Front Range, northern New Mexico, Washington's Yakima River basin, central Arizona, and the Central and Imperial valleys in California. Water Transfers in the West presents background and current information on factors that have encouraged water transfers, typical types of transfers, and their potential negative effects. The book highlights the benefits that water transfers can bring but notes the need for more third-party representation in the processes used to evaluate planned transfers.
Howe and Easter analyze existing evidence on direct and indirect benefits attributable to water, as well as the potential costs of interbasin transfers, and examine feasibility of alternatives. Originally published in 1971