The Impacts of Drought and Water Allocation Practices on River Systems and Communities

Rivers provide water for agriculture, recreation, municipal uses, power generation, and other activities. Each use has a different valuation of water, demand timing, and consumptive-use fraction. Variations in the natural system, in particular drought, constrain the total amount and timing of water available for human use. Infrastructure, regulations, and trade also determine human water use through their effect on the quantity and timing of water availability. Water allocation rules and water infrastructure connect the natural and human components of the system via stream withdrawals, temporary storage, and return flows. We explore the impacts of different water allocation systems on economic and hydrologic outcomes and feedbacks. We contrast a system with rigid allocation, where the amount of water a sector receives and uses depends on established water rights, versus a system in which trading directs water to the highest-value uses. Two-way coupling between the natural and human components exists in both cases, but the nature of the coupling is different. A modeling system will be described that explicitly allows for two-way interactions between the natural and human systems by integrating components for basin hydrology, an economy-wide model of resource allocation, and a water resource allocation model at their intersection. Three hypotheses will be presented that investigate how the coupling between the human and natural systems is affected by water trade in terms of economic production, hydrologic states, and whether snow- versus rain-dominated systems are better suited to promote water trade and mitigate drought impacts.