Microeconomic Ensemble Modeling to Inform Robust Adaptation to Water Scarcity in Irrigated Agriculture

Abstract

This paper compares the economic performance of a dam construction strategy versus a no dam construction (i.e., the statu quo) strategy under multiple scenarios and using a multimodel ensemble of three microeconomic mathematical programming models. The result is a database of simulations representing multiple plausible futures which offers information on uncertainty regarding scenario assumptions and model structure (through the ensemble spread). Using an iterative robust decision-making framework, simulation results are coupled with experts’ knowledge and opinion to detect vulnerabilities in the proposed strategies, quantify potential trade-offs between responses, and identify a robust adaptation strategy. Methods are illustrated as applied to the Órbigo Catchment in Northwestern Spain, where the Douro River Basin Authority (DRBA) will decide in the coming months whether to build two dams to enhance irrigation water supply and reliability. Simulation results show that, for most scenarios and models considered, dam construction costs lead to water prices beyond the willingness of local cereal-growing irrigators to pay. Following a robust decision-making process, parties to the decision unanimously declared the status quo (i.e., no dam construction) strategy to be preferred to the dam construction strategy. This outcome substantiates the need for economic assessments of dam construction projects that account for nonlinear responses by agents to complement technical assessments in decision making.