Three Essays on Agent-Based Model for Water Allocation under Appropriative Rights

Reetwika Basu

doi:10.7273/000005384

This dissertation includes three chapters examining the fundamental economic incentives, constraints, and effects of water rights leasing under droughts in the Western U.S. at a watershed level using an Agent-Based Model (ABM). Chapter One is the introduction. In Chapter Two, I develop a baseline ABM based motivated from real watersheds in the Western U.S. and examine economic outcomes from agricultural water leasing under drought. Chapter three examines the consequences of allowing and prohibiting upstream water leasing and its third-party impacts using the ABM. Chapter four examines the economic impacts of instream flow augmentation, with and without downstream appropriators using the ABM. And finally, Chapter Five concludes. Chapter two is focused on developing an ABM motivated by a real watershed to create a simulation environment and synthetic "agents” as water rights holders within the digital watershed. Each has its economic benefits from the diversion and consumptive use of water. I simulate drought and leasing interactions between the agents using a Smart Market and a Bilateral Trade framework. I conclude that the Smart Market design is a more efficient trading outcome than Bilateral Trade. The model accommodates preferences of the synthetic agents related to water market participation and irrigation and studies its impacts on economic benefits. In Chapter Three, I extend Chapter Two's ABM to simulate interactions between water rights holders with and without upstream trade restrictions and observe the economic and water distribution consequences. Water rights data from the Touchet River Basin (TRB) is used to study the third-party impacts for allowing and restricting upstream trade. When environmental values of instream flows are not accounted for, upstream water leasing generates better overall Net Social Benefits against restricting upstream water rights sales. Chapter Four uses the ABM to simulate leasing diversion rights for streamflow augmentation, which can provide additional water for ecosystem services during drought. However, downstream appropriators may utilize the additional streamflow and reduce the efficacy of leasing for streamflow benefits. Ecology (a government body) that aims to augment instream flows to reach their specific environmental goals will have to pay an extra cost to prevent downstream appropriators from diverting the augmented flow, which reduces overall social benefits. Chapter 5 concludes with a summary discussion of how the research questions in the Chapters relate to each other and the significant outcomes of the simulations performed using the ABM. The ABM can also be used for some studies included in the future recommendations subsection.

Three Essays on Agent-Based Model for Water Allocation under Appropriative Rights

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