The impacts of rising salinity and market inefficiencies on water allocation in the lower Rio Grande

A regional water resource model has been developed to simulate optimal water allocation patterns as both municipal and agricultural consumers respond to changes in water supply and rising salinity levels.;Analysis of contemporary (1995) conditions indicates evidence of inefficiency in regional market institutions. The added security municipalities derive from higher prioritization of water rights is accompanied by economic inefficiencies in regional water allocation, particularly during drought. It is argued that removal of municipal protection would lower regional economic losses at small cost to municipal water users.;Salinity damages to agriculture are modeled with attention to economic principles and a water-salinity-yield relationship that allows greater flexibility in water use with rising salinity. This approach differs from previous work and likely results in smaller reductions in regional net benefits as salinity increases. Empirical data support the use of this method as more accurate in estimating regional salinity effects. Analysis of optimal irrigator behavior indicates that employing surge technology for water intensive crops maximizes regional net benefits. Other more efficient irrigation technologies (relative to flood irrigation) do not enter into optimal solutions. Although useful as a conservation tool, more economically desirable irrigation strategies have little ability to mitigate salinity-related damages.;Salinity-related damages in the municipal sector are conservatively estimated, but still sufficient to influence the economic desirability of reverse osmosis when salinity reaches specified thresholds. Salinity threshold for small municipalities (2 MGD) is 1195 mg/l, and for larger cities (12 MGD) 1655 mg/l. Results indicate that these damages can also play a role in determining target concentrations for TDS removal in finished water.;Regional observations indicate that urban expansion coincides with the removal of large tracts of irrigated farmland. Current trends suggest the reduction in irrigated acreage makes water available at a rate that significantly outpaces any reasonable estimate of growing municipal demand. Under these conditions, water scarcity becomes less common and the impetus for more efficient and costly technologies is reduced. Projected salinity increases (from 900 to 1600 mg/l TDS) result in a relative decline in regional net benefits of 3--4% as compared with holding salinity fixed at contemporary levels. Following conclusions, five policy recommendations are offered for improving regional water resource development.