A hydro-economic model of South Florida water resources system.

South Florida's water infrastructure and ecosystems are under pressure from socio-economic growth. Understanding the region's water resources management tradeoffs is essential for developing effective adaptation strategies to cope with emerging challenges such as climate change and sea level rise, which are expected to affect many other regions in the future. We describe a network-based hydro-economic optimization model of the system to investigate the tradeoffs, incorporating the economic value of water in urban and agricultural sectors and economic damages due to urban flooding while also accounting for water supply to sustain fragile ecosystems such as the Everglades and coastal estuaries. Results illustrate that maintaining high reliability of urban water supply under scenarios of reduced water availability (i.e., drier climate conditions) may trigger economic losses to the Everglades Agricultural Area, which will likely become more vulnerable as competition over scarce water resources increases. More pronounced economic losses are expected in urban and agricultural areas when flows to the Everglades are prioritized. Flow targets for coastal estuaries are occasionally exceeded under optimal flow allocations to various demand nodes, indicating that additional storage may be needed to maintain the environmental integrity of the estuarine ecosystems. Wetter climate conditions, on the other hand, generally lead to increased flows throughout the system with positive effects on meeting water demands, although flood mitigation efforts will necessitate additional releases to the estuaries. Strengths and limitations of the hydro-economic model are discussed.

Influence of water management and natural variability on dissolved inorganic carbon dynamics in a mangrove-dominated estuary.

High-resolution time series measurements of temperature, salinity, pH and pCO2 were made during the period October 2014-September 2015 at the midpoint of Shark River, a 15km tidal river that originates in the freshwater Everglades of south Florida (USA) and discharges into the Gulf of Mexico. Dissolved inorganic carbon dynamics in this system vary over time, and during this study could be classified into three distinct regimes corresponding to October 2014-February 2015 (a wet to dry season transition period), March-May 2015 (dry period) and July-September 2015 (wet period). Average net longitudinal dissolved inorganic carbon (DIC) fluxes and air-water CO2 fluxes from the Shark River estuary were determined for the three periods. Net DIC fluxes to the coast were estimated to vary between 23.2 and 25.4×105mold-1 with an average daily DIC flux of 24.3×105mold-1 during the year of study. CO2 emissions ranged between 5.5 and 7.8×105mold-1 with an average daily value of 6.4×105mold-1 during the year. The differences in estuarine carbon fluxes during the study period are attributed to differences in the relative importance of hydro-climatological drivers. Results suggest that, during months characterized by reduced rainfall, carbon fluxes are affected by water management via control structures in the upstream Everglades marshes. During months with high rainfall, when culverts are closed and rainfall events are more frequent, carbon fluxes depend more on other forcings, such as rainfall and groundwater discharge.

Ecological-economic assessment of the effects of freshwater flow in the Florida Everglades on recreational fisheries.

This research develops an integrated methodology to determine the economic value to anglers of recreational fishery ecosystem services in Everglades National Park that could result from different water management scenarios. The study first used bio-hydrological models to link managed freshwater inflows to indicators of fishery productivity and ecosystem health, then link those models to anglers' willingness-to-pay for various attributes of the recreational fishing experience and monthly fishing effort. This approach allowed us to estimate the foregone economic benefits of failing to meet monthly freshwater delivery targets. The study found that the managed freshwater delivery to the Park had declined substantially over the years and had fallen short of management targets. This shortage in the flow resulted in the decline of biological productivity of recreational fisheries in downstream coastal areas. This decline had in turn contributed to reductions in the overall economic value of recreational ecosystem services enjoyed by anglers. The study estimated the annual value of lost recreational services at $68.81 million. The losses were greater in the months of dry season when the water shortage was higher and the number of anglers fishing also was higher than the levels in wet season. The study also developed conservative estimates of implicit price of water for recreation, which ranged from $11.88 per AF in November to $112.11 per AF in April. The annual average price was $41.54 per AF. Linking anglers' recreational preference directly to a decision variable such as water delivery is a powerful and effective way to make management decision. This methodology has relevant applications to water resource management, serving as useful decision-support metrics, as well as for policy and restoration scenario analysis.

Water quality trading opportunities in two sub-watersheds in the northern Lake Okeechobee watershed.

For decades, the increase of nutrient enrichment has threatened the ecological integrity and economic sustainability of many rivers, lakes, and coastal waters, including Lake Okeechobee, the second largest freshwater lake in the contiguous United States. Water quality trading programs have been an area of active development to both, reduce nutrient pollution and minimize abatement costs. The objective of this study was to apply a comprehensive modeling framework, integrating a hydrologic-water quality model with an economic model, to assess and compare the cost-effectiveness of a water quality trading program over a command-and-control approach in order to reduce phosphorus loadings to Lake Okeechobee. The Upper Kissimmee (UK) and Taylor Creek/Nubbin Slough (TCNS) sub-watersheds, identified as major sources of total phosphorus (TP) loadings to the lake, were selected for this analysis. The effect of different caps on the market potential was assessed while considering four factors: the least-cost abatement solutions, credit prices, potential cost savings, and credit supply and demand. Hypothetical trading scenarios were also developed, using the optimal caps selected for the two sub-watersheds. In both sub-watersheds, a phosphorus credit trading program was less expensive than the conventional command-and-control approach. While attaining cost-effectiveness, keeping optimal credit prices, and fostering market competition, phosphorus reduction targets of 46% and 32% were selected as the most appropriate caps in the UK and TCNS sub-watersheds, respectively. Wastewater treatment facilities and urban areas in the UK, and concentrated animal feeding operations in the TCNS sub-watershed were identified as potential credit buyers, whereas improved pastures were identified as the major credit sellers in both sub-watersheds. The estimated net cost savings resulting from implementing a phosphorus trading program in the UK and TCNS sub-watersheds were 76% ($ 34.9 million per year) and 45% ($ 3.2 million per year), respectively. It is important to note that the realization of the environmental and economic benefits of this market-based alternative is also contingent on other important factors, such as the market structure, the specific program rules, the risk perception, and the education and outreach to develop trusted relationships among regulatory agencies, the public sector, and other stakeholders. Nevertheless, this research provided the foundation for stakeholders to better understand whether water quality trading has the potential to work in the Lake Okeechobee watershed and to facilitate the development of a pilot program.

Modeling a phosphorus credit trading program in an agricultural watershed.

Water quality and economic models were linked to assess the economic and environmental benefits of implementing a phosphorus credit trading program in an agricultural sub-basin of Lake Okeechobee watershed, Florida, United States. The water quality model determined the effects of rainfall, land use type, and agricultural management practices on the amount of total phosphorus (TP) discharged. TP loadings generated at the farm level, reaching the nearby streams, and attenuated to the sub-basin outlet from all sources within the sub-basin, were estimated at 106.4, 91, and 85 mtons yr(-)(1), respectively. Almost 95% of the TP loadings reaching the nearby streams were attributed to agriculture sources, and only 1.2% originated from urban areas, accounting for a combined TP load of 87.9 mtons yr(-)(1). In order to compare a Least-Cost Abatement approach to a Command-and-Control approach, the most cost effective cap of 30% TP reduction was selected, and the individual allocation was set at a TP load target of 1.6 kg ha(-1) yr(-1) (at the nearby stream level). The Least-Cost Abatement approach generated a potential cost savings of 27% ($1.3 million per year), based on an optimal credit price of $179. Dairies (major buyer), ornamentals, row crops, and sod farms were identified as potential credit buyers, whereas citrus, improved pastures (major seller), and urban areas were identified as potential credit sellers. Almost 81% of the TP credits available for trading were exchanged. The methodology presented here can be adapted to deal with different forms of trading sources, contaminants, or other technologies and management practices.

Application of non-market valuation to the Florida Keys marine reserve management.

The quality of the coral reefs in the Florida Keys is essential to sustain nature-based tourism in the Keys. The recently established marine reserves (MR) are expected to improve the reef environment, particularly coral and fish abundance and diversity. In this paper, a combined model of travel cost and contingent behavior was estimated in order to measure the non-market recreational benefits of reef quality improvements. The results indicated that an average visitor would undertake 43-80% more number of trips to the Florida Keys and experience a 69% increase in the use values per trip, as a result of the MR-induced reef quality improvements. The above non-market value estimates were further applied to evaluating alternative management proposals for funding the MR program. It was found that the annual management costs of the MR program would constitute an insignificant portion--only around one to 2%--of the annual recreational benefits that the MR would generate. The results provide a strong economic justification for designing user-based funding mechanisms in order to make the MR program self-sustaining in the future.

Controlling Forest Damage by Dispersive Beaver Populations: Centralized Optimal Management Strategy.

The beaver (Castor canadensis) population in the United States has caused severe damage to valuable timberland through dam-building and flooding of bottomland forest. Traditionally, beavers have provided a source of livelihood to a small group of people. However, recent low pelt prices have failed to stimulate adequate trapping pressure, and thus have resulted in increased beaver populations and damage losses. The low trapping pressure has left the burden of nuisance control on property owners. Since beaver populations are mobile, beaver extermination in controlled parcels results in beaver immigration from neighboring less controlled parcels. Beaver migration from less controlled to controlled parcels imposes an external cost (negative diffusion externality) on the owners of controlled parcels because they must incur the future cost of trapping immigrating beavers. Unless all land owners agree to control the beaver population simultaneously, the diffusion externality can decrease the incentive of individual landowners to control nuisance beavers, thereby driving a wedge between social and private needs for such control. This study attempts to develop a bioeconomic model that incorporates dispersive population dynamics of beavers into the design of a cost-minimizing trapping strategy. Attention is focused on the situation where all landowners in a given habitat share a common interest in controlling beaver damages, and thus collectively agree to place the area-wide control decision in the hands of a public agency on a cost-sharing basis. The public manager is assumed to minimize the present value of combined timber damage and trapping costs over a finite period of time, subject to spatiotemporal dynamics of beaver population. These dynamics are summarized by a parabolic diffusive Volterra-Lotka partial differential equation, and the population control problem is cast in the framework of a distributed-parameter-control model. The cost-minimizing area-wide trapping model accounts for net migration at each location and time, and characterizes the beaver-control strategy that leaves sufficient beavers to strike an optimal balance between timber damage and trapping costs. The marginality condition governing this trade-off requires that avoided timber damage (measured as the imputed nuisance value, or "shadow price," of the beaver stock in the area) be balanced by trapping cost. The optimality system for this problem is solved numerically. The validity of the theoretical model is empirically examined using the bioeconomic data collected for the Wildlife Management Regions of the New York State Department of Environmental Conservation. Empirical simulation generates discrete values for optimal beaver densities and trapping rates across all individual operational units over time. The optimal trapping program causes the initially uneven population distribution to eventually smooth out across the habitat. The sensitivity analysis alternates trapping-cost and timber-damage parameters between high and low values. Increased trapping costs decrease the level of trapping in the initial years of the optimal program, thereby leaving more beavers in the habitat. This triggers more intensive trapping during the later years of the program, requires more beavers to be trapped over the entire time horizon, and results in a higher overall program cost. Alternatively, increased timber-damage potential calls for increased trapping in the initial years of the program. Fewer beavers are maintained in the habitat and less trapping is required in the later years. Perhaps surprisingly, this results in a smaller number of beavers trapped over the entire time horizon.