Integrated Water Allocation-Economic Modelling at a Catchment Scale

Rapid economic and population growth has led to increased demand for water from the industrial and domestic sectors and put pressure on resources available for agricultural production. With growing scarcity and increasing inter-sectorial competition for water the need for efficient and sustainable water allocation policies has also become more important. Finding ways to meet this growing demand and also to achieve positive environmental and economic outcomes requires the aid of modeling tools to analyze the impact of alternative policy scenarios. Water resources management modeling at a catchment scale can provide policy makers with essential information needed to make rational resource allocation decisions. The Musi catchment in India is facing serious challenge to meet the growing demand due to rapid population growth and decline of resources. The intense agricultural practices and absence of reasonable water resources management have led to an increase in water demand which is currently filled by extracting groundwater resources and importing from sources outside the basin. In this paper a modeling framework is introduced that accounts for the interactions between hydrology, water allocation and economics to asses the economic impacts of redistributing surface and ground water at a catchment scale. The modelling approach is based on integrating resource availability and use through a network allocation model integrated with an economic model based on social benefit cost techniques. Resource Allocation Model (REALM) is a simulation model, based on a combination of water balance combined with a linear optimisation algorithm that enables the application of user-defined penalties and priorities to impose constraints and preferential resource use. The economic model will be used to assess the monetary outcome of different water allocations and is in a developmental stage. Resource assessments were conducted at key control nodes in the catchment. Historical hydrologic analysis and stream flow simulation were assessed using a monthly conceptual rainfall-runoff model SYMHYD. REALM was used to build the Musi water allocation model and then to simulate the water supply system that integrates the Musi catchment and the Nagarjuna Sagar project in Krishna and Singur and Manjira in Godavari, which lies outside the catchment but is one of the water sources for Hyderabad city. A scenario approach was used to investigate possible changes. Hypothetical water allocation alternatives representing future development scenarios that would increase water consumption and different water allocation strategies were formulated after consulting the stakeholders in the catchment. Results from the scenario analysis indicate that competition for Musi water is very high. For each scenario levels of assured supply were estimated for each node. The results shows that the transfer of water from agriculture to the urban users may grow over years and that water must come from Nagarjuna Sagar in the future. Hence, the allocation to irrigation is likely to fall over time unless other sources of water such as runoff recycling and water harvesting are used to meet part of the urban demand. Given this, improvements in the productivity of available water, in irrigation efficiency and in crop diversification are essential.