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A Century of Evolution of Modeling for River Basin Planning to the Next Generation of Models, Methods, and Concepts  

Caroline Rosello, Sondoss Elsawah, Joseph Guillaume, and Anthony Jakeman

River Basin models to inform planning decisions have continued to evolve, largely based on predominant planning paradigms and progress in the sciences and technology. From the Industrial Revolution to the first quarter of the 21st century, such modeling tools have shifted from supporting water resources development to integrated and adaptive water resources management. To account for the increasing complexity and uncertainty associated with the relevant socioecological systems in which planning should be embedded, river basin models have shifted from a supply development focus during the 19th century to include, by thes 2000s–2020s, demand management approaches and all aspects of consumptive and non-consumptive uses, addressing sociocultural and environmental issues. With technological and scientific developments, the modeling has become increasingly quantitative, integrated and interdisciplinary, attempting to capture, more holistically, multiple river basin issues, relevant cross-sectoral policy influences, and disciplinary perspectives. Additionally, in acknowledging the conflicts around ecological degradation and human impacts associated with intensive water resource developments, the modeling has matured to embrace the need for adequate stakeholder engagement processes that support knowledge-sharing and trust-building and facilitate the appreciation of trade-offs across multiple types of impacts and associated uncertainties. River basin models are now evolving to anticipate uncertainty around plausible alternative futures such as climate change and rapid sociotechnical transformations. The associated modeling now embraces the challenge of shifting from predictive to exploratory tools to support learning and reflection and better inform adaptive management and planning. Managing so-called deep uncertainty presents new challenges for river basin modeling associated with imperfect knowledge, integrating sociotechnical scales, regime shifts and human factors, and enabling collaborative modeling, infrastructure support, and management systems.

Article

Agricultural Subsidies and the Environment  

Heather Williams

Worldwide, governments subsidize agriculture at the rate of approximately 1 billion dollars per day. This figure rises to about twice that when export and biofuels production subsidies and state financing for dams and river basin engineering are included. These policies guide land use in numerous ways, including growers’ choices of crop and buyers’ demand for commodities. The three types of state subsidies that shape land use and the environment are land settlement programs, price and income supports, and energy and emissions initiatives. Together these subsidies have created perennial surpluses in global stores of cereal grains, cotton, and dairy, with production increases outstripping population growth. Subsidies to land settlement, to crop prices, and to processing and refining of cereals and fiber, therefore, can be shown to have independent and largely deleterious effect on soil fertility, fresh water supplies, biodiversity, and atmospheric carbon.

Article

A Review of Alternative Water Supply Systems in ASEAN  

Cecilia Tortajada, Kristopher Hartley, Corinne Ong, and Ojasvee Arora

Climate change, water scarcity and pollution, and growing water demand across all sectors are stressing existing water supply systems, highlighting the need for alternative water supply (AWS) systems. AWS systems are those that have not typically existed in the traditional supply portfolio of a given service area but may be used to reduce the pressure on traditional water resources and potentially improve the system’s resilience. AWS systems have been used for decades, often where traditional systems are unable to maintain sufficient quantity and quality of water supply. Simpler forms of AWS systems, like rainwater harvesting, have been used for centuries. As human population and water demand have increased, AWS systems now play a larger role in the broader supply portfolio, but these systems alone are not able to fully resolve the increasingly complex mix of problems contributing to water stress. Entrenched challenges that go beyond technical issues include low institutional capacity for developing, operating, and maintaining AWS systems; monitoring water quality; more efficiently using available resources; and establishing clear responsibilities among governments, service providers, and property owners. Like traditional water supply systems, AWS systems should be developed within a sustainability-focused framework that incorporates scenario planning to account for evolving natural and institutional conditions. In ASEAN, the adoption of AWS systems varies among countries and provides context-specific lessons for water management around the world. This article provides an overview of AWS systems in the region, including rainwater harvesting, graywater recycling, wastewater reclamation, desalination, and stormwater harvesting.

Article

Basin Development Paths: Lessons From the Colorado and Nile River Basins  

Kevin Wheeler

Complex societies have developed near rivers since antiquity. As populations have expanded, the need to exploit rivers has grown to supply water for agriculture, build cities, and produce electricity. Three key aspects help to characterize development pathways that societies have taken to expand their footprint in river basins including: (a) the evolution of the information systems used to collect knowledge about a river and make informed decisions regarding how it should be managed, (b) the major infrastructure constructed to manipulate the flows of water, and (c) the institutions that have emerged to decide how water is managed and governed. By reflecting on development pathways in well-documented transboundary river basins, one can extract lessons learned to help guide the future of those basins and the future of other developing basins around the world.

Article

Bioeconomic Models  

Ihtiyor Bobojonov

Bioeconomic models are analytical tools that integrate biophysical and economic models. These models allow for analysis of the biological and economic changes caused by human activities. The biophysical and economic components of these models are developed based on historical observations or theoretical relations. Technically these models may have various levels of complexity in terms of equation systems considered in the model, modeling activities, and programming languages. Often, biophysical components of the models include crop or hydrological models. The core economic components of these models are optimization or simulation models established according to neoclassical economic theories. The models are often developed at farm, country, and global scales, and are used in various fields, including agriculture, fisheries, forestry, and environmental sectors. Bioeconomic models are commonly used in research on environmental externalities associated with policy reforms and technological modernization, including climate change impact analysis, and also explore the negative consequences of global warming. A large number of studies and reports on bioeconomic models exist, yet there is a lack of studies describing the multiple uses of these models across different disciplines.

Article

Business Models for Sustainability  

Nancy Bocken

Human activity is increasingly impacting the environment negatively on all scales. There is an urgent need to transform human activity toward sustainable development. Business has a key role to play in this sustainability transition through technological, product and service, and process innovations, as well as innovative business models. Business models can enable new technologies, and vice versa. These models are therefore important in the transition to sustainability. Business models for sustainability, or synonymously, sustainable business models, take holistic views on how business is operated in relation to its stakeholders, including the society and the natural environment. They incorporate economic, environmental, and social aspects in an organization’s purpose and performance measures; consider the needs of all stakeholders rather than giving priority to owner and shareholder expectations; treat “nature” as a stakeholder; and take a system as well as a firm-level perspective on the way business is conducted. The research field of sustainable business models emerged from fields such as service business models, green and social business models, and concepts such as sharing and circular economy. Academics have argued that the most service-oriented business models can achieve a “factor 10” environmental impact improvement if designed the right way. Researchers have developed various conceptualizations, typologies, tools, and methods and reviews on sustainable business models. However, sustainable business models are not yet mainstream. Important research areas include the following: (a) tools, methods, and experimentation; (b) the assessment of sustainability impact and rebounds for different stakeholders; (c) sufficiency and degrowth; and (d) the twin revolution of sustainability and digital transition. First, a plethora of tools and approaches are available for inspiration and for creation of sustainable business model designs. Second, in the field of assessment, methods have been based on life cycle thinking considering the supply chain and how a product is (re)used and eventually disposed of. In the field of sufficiency, authors have recognized the importance of moderating consumption through innovative business models to reduce the total need for products, reducing the impact on the environment. Finally, researchers have started to investigate the important interplay between sustainability and digitalization. Because of the potential to achieve a factor 10 environmental impact improvement, sustainable business models are an important source of inspiration for further work, including the upscaling of sustainable business models in established businesses and in new ventures. Understanding how to design better business models and preempting their usage in practice are essential to achieve a desired positive impact. In the field of sufficiency, the macro-impacts of individual and business behavior would need to be better understood. In the area of digital innovation, environmental, societal, and economic values need scrutinization. Researchers and practitioners can leverage the popularity of this field by addressing these important areas to support the development and roll-out of sustainable business models with significantly improved economic, environmental, and societal impact.

Article

Catastrophic Droughts and Their Economic Consequences  

Farnaz Pourzand and Ilan Noy

The effect of climate change on hydrology and water resources is possibly one of the most important current environmental challenges, and it will be important for the rest of the 21st century. Climate change is anticipated to intensify the hydrological cycle and to change the temporal and spatial distribution patterns of water resources. It is predicted to increase the frequency and intensity of extreme hydrological events, such as heavy rainfall and floods, but in some locations also droughts. Water-related hazards occur due to complex interactions between atmospheric and hydrological systems. These events can then cause economic disasters, societal disturbances, and environmental impacts, which can pose a major threat to lives and livelihoods if they happen in places that are exposed and vulnerable to them. The economic impacts of extreme hydrological events can be separated into direct damage and indirect losses. Direct damage includes the damages to fixed assets and capital; losses of raw materials, crops, and extractable natural resources; and, most importantly, mortality, morbidity, and population displacement. All can be a direct consequence of the extreme hydrological event. Indirect losses are reductions in economic activity, particularly the production of goods and services—which will be greatly decreased after the disaster and because of it. Possibly the most damaging hydro-meteorological hazard, drought, is also the one that is least understood and the most difficult to quantify—even its onset is often difficult to identify. Drought is recognized as being associated with some of the most high-profile humanitarian disasters of past years, threatening the lives and livelihoods of millions of people, particularly those living in semi-arid and arid regions. Drought impacts depend on a set of weather parameters—high temperatures, low humidity, the timing of rain, and the intensity and duration of precipitation, as well as its onset and termination—and they depend on the population and assets and their vulnerabilities. While drought has wide-ranging effects on many economic sectors, the agricultural sector bears much of the impact, as it is very dependent on precipitation and evapotranspiration. Approximately 1.3 billion people rely on agriculture as their main source of income. In developing countries, the agriculture sector absorbs up to 80% of all direct damages from droughts. Droughts may be the biggest threat to food security and rural livelihoods globally, and they can increase local poverty, displace large numbers of people, and hinder the already fragile progress that has been made toward the achievement of Sustainable Development Goals (SDGs). As such, understanding droughts’ impacts, identifying ways to prevent or ameliorate them, and preventing further deterioration in the climatic conditions and social vulnerabilities that are their root causes are all of utmost importance.

Article

Water Resource Management: Challenges and Opportunities with Game Theory Approaches  

Kim Hang Pham Do

Water is essential to life and development in terms of both quantity and quality. Water resources continue to face various pressures brought about by climate change, growing population, and increased economic demand for water. Managing this unique and precious resource has become a global challenge. The conflicts over water issues often arise not only among stakeholders facing limited water resources but also from social and political aspects of the design, operation, and management of water supply projects. A fair and sustainable system of sharing water resources, therefore, is one of the greatest challenges we face in the 21st century. In the absence of negotiation and lack of clear property rights, water is a source for human conflicts. Game theory as strategic analysis has provided powerful tools and been applied to many fields, including water resources management. The basic assumptions of game theory emphasize that rational players who pursue well-defined objectives and assume knowledge of others would accordingly form expectations of other decision makers’ behavior. Hence, game theory is used to predict agents’ behaviors toward fulfilling their own interests during the interactive decision-making process with other agents. Since the 1950s, game theory has become an important tool for analyzing important aspects of water resource management. Yet despite the rapid increase in the application of game theoretical approaches to water resource management, many challenges remain. The challenges of the early 21st century, including resource constraints, financial instability, inequalities within and between countries, and environmental degradation, present opportunities to address and reach resolutions on how water is governed and managed to ensure that everyone has sufficient access to water.

Article

Changes in Land Use Influenced by Anthropogenic Activity  

Lang Wang and Zong-Liang Yang

The terms “land cover” and “land use” are often used interchangeably, although they have different meanings. Land cover is the biophysical material at the surface of the Earth, whereas land use refers to how people use the land surface. Land use concerns the resources of the land, their products, and benefits, in addition to land management actions and activities. The history of changes in land use has passed through several major stages driven by developments in science and technology and demands for food, fiber, energy, and shelter. Modern changes in land use have been increasingly affected by anthropogenic activities at a scale and magnitude that have not been seen. These changes in land use are largely driven by population growth, urban expansion, increasing demands for energy and food, changes in diets and lifestyles, and changing socioeconomic conditions. About 70% of the Earth’s ice-free land surface has been altered by changes in land use, and these changes have had environmental impacts worldwide, ranging from effects on the composition of the Earth’s atmosphere and climate to the extensive modification of terrestrial ecosystems, habitats, and biodiversity. A number of different methods have been developed give a thorough understanding of these changes in land use and the multiple effects and feedbacks involved. Earth system observations and models are examples of two crucial technologies, although there are considerable uncertainties in both techniques. Cross-disciplinary collaborations are highly desirable in future studies of land use and management. The goals of mitigating climate change and maintaining sustainability should always be considered before implementing any new land management strategies.

Article

Climate Adaptation and Public Health  

Sarah E. Scales, Julia Massi, and Jennifer A. Horney

Climate change is affecting every region of the world and is accelerating at an alarming rate. International efforts for mitigating climate change, like the Paris Agreement, through reductions in greenhouse gases are vital for slowing the global increase in temperatures. However, these mitigation measures will not have immediate impact, so urgent action is needed to address negative impacts currently posed by climate change. Adaptation measures are central to this response now, and will continue to be critical for protecting human health as temperatures rise and climate-related disasters increase in both frequency and severity. To maximize the effectiveness of adaptation measures, the health impacts of disasters should be well-characterized at the global, regional, national, and local levels. Surveillance and early warning systems are vital tools for early identification and warning of hazards and their potential impacts. Increasing global capacity to identify causes of morbidity and mortality directly and indirectly attributable to disasters are in line with the objectives of the Sustainable Development Goals and Bangkok Principles of the Sendai Framework for Disaster Risk Reduction. Both improving data collected in disaster settings and more effectively using that information in real time are central to reducing the human-health impacts of disasters. The human-health impacts of climate change and associated disasters are interrelated. Climate change and commensurate changes in environmental suitability, vector viability, and human migration strongly influence the prevalence and seasonality of infectious and communicable diseases. Both drought and flood contribute to food and water insecurity, leading to a higher prevalence of undernourishment and malnourishment, especially in children. Compromised nutritional status, in conjunction with resulting human migration, leave individuals immunocompromised and populations at a high risk for spread of infectious disease. Extreme heat exposure likewise compromises individuals’ ability to regulate their physiological response to external stressors. Disasters of all classifications can result in exposure to environmental hazards, decrease air quality, and negatively affect mental health. Accordingly, health adaptation measures to climate change must be equally interrelated, addressing needs across disciplines, at both individual and community levels, and incorporating the many facets of the health needs of affected populations.

Article

Data Infrastructures in Ecology: An Infrastructure Studies Perspective  

Florence Millerand and Karen S. Baker

The development of information infrastructures that make ecological research data available has increased in recent years, contributing to fundamental changes in ecological research. Science and Technology Studies (STS) and the subfield of Infrastructure Studies, which aims at informing infrastructures’ design, use, and maintenance from a social science point of view, provide conceptual tools for understanding data infrastructures in ecology. This perspective moves away from the language of engineering, with its discourse on physical structures and systems, to use a lexicon more “social” than “technical” to understand data infrastructures in their informational, sociological, and historical dimensions. It takes a holistic approach that addresses not only the needs of ecological research but also the diversity and dynamics of data, data work, and data management. STS research, having focused for some time on studying scientific practices, digital devices, and information systems, is expanding to investigate new kinds of data infrastructures and their interdependencies across the data landscape. In ecology, data sharing and data infrastructures create new responsibilities that require scientists to engage in opportunities to plan, experiment, learn, and reshape data arrangements. STS and Infrastructure Studies scholars are suggesting that ecologists as well as data specialists and social scientists would benefit from active partnerships to ensure the growth of data infrastructures that effectively support scientific investigative processes in the digital era.

Article

Decision-Making in a Water Crisis: Lessons From the Cape Town Drought for Urban Water Policy  

Johanna Brühl, Leonard le Roux, Martine Visser, and Gunnar Köhlin

The water crisis that gripped Cape Town over the 2016–2018 period gained global attention. For a brief period of time in early 2018, it looked as if the legislative capital of South Africa would become the first major city in the world to run out of water. The case of Cape Town has broad implications for how we think about water management in a rapidly urbanizing world. Cities in the global South, especially, where often under-capacitated urban utilities need to cope with rapid demographic changes, climate change, and numerous competing demands on their tight budgets, can learn from Cape Town’s experience. The case of Cape Town draws attention to the types of decisions policymakers and water utilities face in times of crisis. It illustrates how these decisions, while being unavoidable in the short term, are often sub-optimal in the long run. The Cape Town drought highlights the importance of infrastructure diversification, better groundwater management, and communication and information transparency to build trust with the public. It also shows what governance and institutional changes need to be made to ensure long-term water security and efficient water management. The implementation of all of these policies needs to address the increased variability of water supplies due to increasingly erratic rainfall and rapidly growing urban populations in many countries. This necessitates a long-term planning horizon.

Article

Deforestation: Drivers, Implications, and Policy Responses  

Christiane W. Runyan and Jeff Stehm

Over the last 8,000 years, cumulative forest loss amounted to approximately 2.2 billion hectares, reducing forest cover from about 47% of Earth’s land surface to roughly 30% in 2015. These losses mostly occurred in tropical forests (58%), followed by boreal (27%) and temperate forests (8%). The rate of loss has slowed from 7.3 Mha/year between 1990–2000 to 3.3 Mha/year between 2010–2015. Globally since the 1980s, the net loss in the tropics has been outweighed by a net gain in the subtropical, temperate, and boreal climate zones. Deforestation is driven by a number of complex direct and indirect factors. Agricultural expansion (both commercial and subsistence) is the primary driver, followed by mining, infrastructure extension, and urban expansion. In turn, population and economic growth drive the demand for agricultural, mining, and timber products as well as supporting infrastructure. Population growth and changing consumer preferences, for instance, will increase global food demand 50% by 2050, possibly requiring a net increase of approximately 70 million ha of arable land under cultivation. This increase is unlikely to be offset entirely by agricultural intensification due to limits on yield increases and land quality. Deforestation is also affected by other factors such as land tenure uncertainties, poor governance, low capacity of public forestry agencies, and inadequate planning and monitoring. Forest loss has a number of environmental, economic, and social implications. Forests provide an expansive range of environmental benefits across local, regional, and global scales, including: hydrological benefits (e.g., regulating water supply and river discharge), climate benefits (e.g., precipitation recycling, regulating local and global temperature, and carbon sequestration), biogeochemical benefits (e.g., enhancing nutrient availability and reducing nutrient losses), biodiversity benefits, and the support of ecosystem stability and resiliency. The long-term loss of forest resources also negatively affects societies and economies. The forest sector in 2011 contributed roughly 0.9% of global GDP or USD 600 billion. About 850 million people globally live in forest ecosystems, with an estimated 350 million people entirely dependent on forest ecosystems for their livelihoods. Understanding how to best manage remaining forest resources in order to preserve their unique qualities will be a challenge that requires an integrated set of policy responses. Developing and implementing effective policies will require a better understanding of the socio-ecological dynamics of forests, a more accurate and timely ability to measure and monitor forest resources, sound methodologies to assess the effectiveness of policies, and more efficacious methodologies for valuing trade-offs between competing objectives.

Article

Desalination Technology and Advancement  

P.S. Goh, A.F. Ismail, and N. Hilal

Water scarcity as an outcome of global population expansion, climate change, and industrialization calls for new and innovative technologies to provide sustainable solutions to address this alarming issue. Seawater and brackish water are abundantly available on earth for drinking water and industrial use, and desalination is a promising approach to resolving this global challenge. Recently, the considerable reduction in the cost of desalination has contributed to the growing capacity for global desalination. The desalination technologies that have been deployed worldwide for clean water production can be categorized into two main types: membrane-based and thermal-based. Technological advancement in this field has focused on the reduction of capital and operating cost, particularly the energy consumption of the systems. Seawater and brackish desalination technologies are promising solutions for water shortages.

Article

Economic Development and Groundwater Sustainability  

Cecilia Tortajada and Francisco González-Gómez

An analysis is made of the relationship between economic development and water sustainability in Campo de Dalías, in southeastern Spain. What used to be a poor, deserted region based on traditional agriculture has become one of the most prosperous regions in Spain. Economic development has been based on highly productive greenhouse agriculture, but this has resulted in the overexploitation of the aquifer that supplies water to different users in the region. Contradictions are considered between economic development and water sustainability in the area, as well as the plans and policies that have been put in place to improve the status of the aquifer but that have had limited success so far.

Article

Economic Instruments to Control Greenhouse Gas Emissions: REDD+  

Rawshan Ara Begum

Deforestation causes up to 10% of global anthropogenic carbon emissions. Reducing emissions from deforestation and degradation and enhancing forest carbon stocks can contribute to controlling greenhouse gas (GHG) emissions and limit global warming and climate change. However, global warming cannot be limited without decreasing the use of fossil fuel or emission-intensive energy sources. The forestry sector could contribute 7%–25% of global emissions reduction by 2020. Apart from emissions reduction and sink (mitigation), forests also provide cobenefits such as ecosystem services (providing food, timber, and medicinal herbs); biodiversity conservation; poverty reduction; and water quality, soil protection, and climate regulation. In 2005, the UNFCCC introduced a cost-effective mitigation strategy to reduce emissions from deforestation (RED) in developing countries. The UN’s initiative to reduce emissions from deforestation and forest degradation (REDD+) aims to transform forest management in developing countries, where the majority of tropical forests are located, using finances from developed countries. REDD+ seeks to reward actors for maintaining or restoring forests, acting as an economic instrument by putting a monetary value on every tonne of CO2 that is prevented from entering the atmosphere. Implementation of REDD+ requires economic and policy instruments that can help to control GHG emissions by enhancing carbon sinks, reducing deforestation and forest degradation, and managing sustainable forests. Payment for environmental services offers opportunities for either cofinancing or economic valuation in regard to REDD+ implementation. The challenge is to identify the most appropriate and cost-effective instrument. REDD+ fulfills the current needs for economic instruments and incentives that can be implemented with existing land use and forestry policies to control global GHG emissions. However, REDD+ requires forest governance, law enforcement, clarification of land and resource rights, and forest monitoring to work in the long term. REDD+ payments can be made for results-based actions, and the UNFCCC has identified potential ways to pay for them, but challenges remain, such as clarifying financing or funding sources, distribution of funding and sharing of benefits or incentives, carbon rights, and so on. Different aspects pf the implementation, effectiveness, and scale of REDD+ and their interactions with economic, social, and environmental benefits are important for successful REDD+ implementation.

Article

Ecosystem Services into Water Resource Planning and Management  

Phoebe Koundouri, Angelos Alamanos, Kostas Dellis, Conrad Landis, and Artemis Stratopoulou

The broad economic notion of ecosystem services (ES) refers to the benefits that humans derive, directly or indirectly, from ecosystem functions. Provisioning ES refer to human-centered benefits that can be extracted from nature (e.g., food, drinking water, timber, wood fuel, natural gas, oils, etc.), whereas regulating ES include ecosystem processes that moderate natural phenomena (pollination, decomposition, flood control, carbon storage, climate regulation, etc.). Cultural ES entail nonmaterial benefits accruing to the cultural advancement of people, such as the role of ecosystems in national and supranational cultures, recreation, and the spur of knowledge and creativity (music, art, architecture). Finally, supporting ES refer to the main natural cycles that nature needs to function, such as photosynthesis, nutrient cycling, the creation of soils, and the water cycle. Most ES either depend on or provide freshwater services, so they are linked to water resources management (WRM). The concept of ES initially had a pedagogical purpose to raise awareness on the importance of reasonable WRM; later, however, it started being measured with economic methods, and having policy implications. The valuation of ES is an important methodology aimed at achieving environmental, economic and sustainability goals. The total economic value of ecosystems includes market values (priced) as well as nonmarket values (not explicit in any market) of different services for humanity’s benefit. The valuation of ES inherently reflects human preferences and perceptions regarding the contribution of ecosystems and their functions to the economy and society. The ES concept and associated policies have been criticized on the technical weaknesses of the valuation methods, interdisciplinary conflicts (e.g., ecological vs. economic perception of value), and ethical aspects on the limits of economics, nature’s commodification, and its policy implications. Since valuation affects the incentives and policies aimed at conserving key ES, e.g., through payment schemes, it is important to understand the way that humans decide and develop preferences under uncertainty. Behavioral economics attempts to understand human behavior and psychology and can help to identify appropriate institutions and policies under uncertainty that enhance ecosystem services that are key to WRM.

Article

The Economics of Institutional Changes in the Water Sector: Methods, Evidence, and a Call for Systems Thinking  

Marc Jeuland, Travis Dauwalter, and Omar Hopkins

As water stress increases globally with population, economic growth, and climate change, investments in institutional or management improvements and infrastructure are becoming more and more essential. Water institutions, especially in lower- and middle-income countries (LMIC), typically struggle with performance, because of inadequate capacity, misaligned incentives, or bad policies, but institutional reforms have traditionally received less focus than technical and engineering inputs. Working from a typology of six different institutional changes, the article reviews existing evidence on the impacts of such reforms, focusing on lower- and middle-income country (LMIC) contexts where institutional problems are especially acute. Most evidence pertains to changing consumer incentives in an attempt to improve cost recovery, especially via tariff reform, as well as changing ownership of utilities through privatization. Results vary widely across contexts and over time, and the details of implementation of reforms are often important, but much of the empirical evidence based on statistical or case study evidence is speculative. A systems dynamic modeling (SDM) approach can be helpful for thinking about this heterogeneity and the complexity of LMIC utility challenges. Water utility systems are a good application for SDMs because they feature complex boundaries, nonlinearities and thresholds, delayed effects, a tendency toward self-organization even if in a low-performance equilibrium, and a high degree of interconnection between a number of performance variables. Indeed, the SDM framework is useful precisely because it requires careful consideration and advances awareness by various stakeholders of the complex social feedback that may exist in water use systems, while conceding that the problems that impede effective water delivery are dynamic and interconnected, and that general optimal solutions to water service provision challenges may be elusive. In the latter portion of the article, the role that SDM can play in clarifying inconsistencies in the literature is explored through a simple illustrative example modelled on a real-world intervention with the Lusaka Water and Sewerage Company in Zambia. This utility suffers from all of the common problems of LMIC utilities, including high nonrevenue water losses, low bill collection, tariffs, poor cost recovery, inadequate maintenance and low investment and therefore poor quality service delivery, and a high dependence on a persistent flow of subsidies to both rehabilitate and extend the water supply and sewer network. The SDM analysis reveals the interdependencies between these variables, and sheds light on the long-term reverberations of external interventions in the system. Nonetheless, the illustrative SDM is relatively simple, and various improvements could be made to add realism on both the utility operations side, and on the water consumer side. Moreover, data limitations preclude a calibration to existing conditions, and there would be additional value in testing the basic framework using richer data and a more engaged stakeholder process.

Article

Economics of Water Security in India: Need for Strengthening Natural Capital  

V. Ratna Reddy

Water security forms the basis for achieving multi-dimensional poverty alleviation. Water security is necessary for moving toward sustainable development. It reduces poverty and improves quality of life. Achieving water security is increasingly becoming a policy challenge in most of the developing countries like India. Water security is a comprehensive concept that comprises access to quantity and quality for different users and uses, ensuring environmental, economic, and social sustainability in the long run. It needs to be achieved at different scales (i.e., household, regional, and national levels). This calls for an integrated approach incorporating hydrological, socioeconomic, and ecosystem aspects. Water resources accounting is critical for ensuring water security. Resource accounting helps in identifying efficient and optimum allocation of resources to various components of water security. Integrating the costs of strengthening the natural resource base and environmental externalities is likely to help sustaining services in the long run. Integrating the economics of protecting the natural resource base into the planning and designing of service delivery is critical in this regard.

Article

The Economics of Watershed Management  

Brent M. Haddad

Watersheds are physical regions from which all arriving water flows to a single exit point. The shared hydrology means that other biophysical systems are linked, typically with upper-gradient regions influencing lower-gradient ones. This situation frames the challenge of managing economic and other uses of watersheds both in terms of individual activities and their influence on other connected processes and activities. Economics provides concepts and methods that help managers with decision making in the complex physical, biological, and institutional environment of a watershed. Among the important concepts and methods that help characterize watershed processes are externalities, impacts of economic activity that fall upon individuals not party to the activity, and third parties, individuals impacted without consent. Public goods and common pool resources describe categories of things or processes that by their nature are not amenable to regular market transactions. Their regulation requires special consideration and alternative approaches to markets. Benefit-cost analysis and valuation are related methods that provide a means to compare alternative uses of the same system. Each is based on the normative argument that the best use provides the greatest net benefits to society. And intergenerational equity is a value orientation that argues for preservation of watershed processes for the benefit of future generations. The need for effective watershed management methods pushed 20th-century economists to adapt their discipline to the complexity of watersheds, from which emerged subdisciplines of natural resource economics, environmental economics, and ecological economics. The field is still evolving with a growing interest in data gathering through land-based low-cost data collection systems and remote sensing, and in emerging data analysis techniques to improve management decisions.