15.2.1.1. Impacts and Adaptation Options
The impacts of hydrological changes and options for effective adaptation will
depend on the nature of the hydrological changes, the amount of buffering provided
by natural and artificial storage capacity, the nature of demands on the resource,
and the effectiveness with which institutions in place balance competing demands.
Continued increases in demand are likely for the multiple services provided
by North American water resources, encompassing out-of-stream and instream uses.
Adaptations to the effects of climate change therefore will occur in conjunction
with adjustments to changes in the level and characteristics of water demands.
A major comparative study of six U.S. water resource systems found that although
climate change could have significant and often adverse impacts on system performance,
adjustments to reservoir operations could be made, allowing those impacts to
be smaller than the underlying hydrological changes (Lettenmaier et al., 1999).
The authors also found that "The effects of anticipated demand growth and
other plausible future operational considerations…would about equal or
exceed the effects of climate change over system planning horizons" (Lettenmaier,
et al., 1999).
The importance of future changes in demand is echoed by Frederick and Schwarz
(1999). They found that even in the absence of climate change, the annual cost
of supplying water to meet projected increases in U.S. water demands would be
about US$13.8 billion higher in 2030 than in 1995, based on the current trend
of increasingly using conservation to balance growing demands with supplies.
This trend has been driven by "…the high costs of developing new supplies,
environmental concerns, a growing appreciation for the values of instream flows
and efforts to improve water quality" (Frederick and Schwarz, 1999). Using
projected runoff changes calculated by Wolock and McCabe (2000) for 18 water
resource regions, the study found that runoff increases projected by the HadCM2
model tended to reduce the cost of balancing future water supplies and demands,
whereas the reduced flows projected by the CCC model resulted in large cost
increases. With the CCC model projections, the study found that under an "efficient
management" scenario, annual water costs could increase "…by
nearly US$105 billion, about US$308 per person. Much higher cost increases would
result from policies to maintain relatively high streamflow levels under such
dry conditions" (Frederick and Schwarz, 1999).
This finding—that institutions can have significant impacts on the costs
arising from reduced water availability—is supported by a study that assessed
the possible consequences of a severe sustained drought on the Colorado River
system (Lord et al., 1995). The study authors found that the "Law of the
River," as currently interpreted and implemented, would leave sensitive
biological resources, hydropower generation, recreational values, and Upper
Colorado basin water users vulnerable to damages despite extraordinary engineering
attempts to drought-proof the river. The study also found that certain proposed
institutional and system operating changes could considerably alter the level
and incidence of the damages (Booker, 1995; Kenney, 1995; Lord et al., 1995;
Sangoyomi and Harding, 1995). For example, reallocation from low- to high-valued
uses (e.g., through intrastate or interstate water marketing) and changes in
reservoir storage policies to hold water in the Upper Colorado basin to reduce
evaporative losses could reduce consumptive use damages by more than 90% (Booker,
1995).
Such "what if" analyses can foster creative thinking about adaptation
options. Future adaptation strategies also are likely to build on current creative
solutions to meeting water supply challenges. For example, when increases in
agricultural and sewerage runoff in the Catskill/Delaware watershed region threatened
the quality of New York City's water supplies, the city was faced with
a choice of either building an artificial filtration plant or taking action
to protect and restore the natural purification capacity of the watershed's
ecosystem. The capital cost of the filtration plant would have been US$6-8
billion, plus annual operating costs of US$300 million. The city found that
for a fraction of that cost it could enter into agreements with landowners in
the watershed to adopt land-use practices that would adequately protect water
quality, making the filtration plant unnecessary (PCAST, 1998; Platt et al.,
2000).
Adjustments to the effects of climate change as well as to evolving demands
for out-of-stream and instream water uses may entail impacts on the distribution
of water-use benefits. The question of who will bear the costs of any reduction
in water availability depends on the nature and ownership of existing water
rights, how those rights are measured, and how they may be modified by other
policies. In the United States, federal legislation—including the Endangered
Species Act and the Clean Water Act—has regulated or constrained development
of many new water projects and could be applied to modify existing water diversions
(WWPRAC, 1998). Native American (aboriginal) communities often possess reserved
water rights that, despite their high priority, have never been developed or
clearly quantified. Substantial litigation and negotiation efforts have focused
on clarifying these rights. Any significant change in water availability may
heighten tensions between these communities and neighboring water users (Echohawk
and Chambers, 1991). Under riparian water law and permit systems, governmental
authorities may have substantial discretion in regulating water uses under drought
conditions (Abrams, 1990; Flood, 1990; Sherk, 1990; Dellapenna, 1991; Scott
and Coustalin, 1995). Under the prior appropriation system of water law, which
is followed in western Canada and most states in the western portion of the
United States, the risk of a shortfall generally is inversely proportional to
the seniority of the right. Many junior rightholders, however, have access to
water stored in reservoirs, which improves their security of supply.
Several studies have argued that improving the functioning of water markets
could help to create the kind of flexibility needed to respond to uncertain
changes in future water availability (e.g., Trelease, 1977; Tarlock, 1991; OTA,
1993; Miller et al., 1997). If water supplies decline in particular locations
or seasons, water markets could soften the impacts by moving water from lower
to higher valued uses. In the western United States, where irrigation now accounts
for more than 80% of consumptive water use, water market activity is likely
to continue the current trend of movement of water out of irrigated agriculture
to accommodate other water uses (WWPRAC, 1998). However, water markets are not
likely to adequately protect instream flows and sensitive biological resources
unless public agencies are given budgets to buy or rent water to protect those
values (Wilkinson, 1989; NRC, 1992). In addition, water rights have to be clearly
defined for water markets to function properly. Even in the western United States,
where water markets have developed rapidly in recent years (Saliba and Bush,
1987; NRC, 1992; Colby, 1996; Yoskowitz, 1999), market development has been
hampered by the fact that water rights often are not well documented (e.g.,
Costello and Kole, 1985; Gould, 1988; Colby, 1998). To avoid adverse impacts
on other water users, water authorities typically review each transfer proposal.
The entire process often entails substantial transaction costs, and these costs
differ significantly across jurisdictions (Saliba and Bush, 1987; MacDonnell,
1990; NRC, 1992). This suggests that administrative practices and other institutional
factors affect the efficiency of the water transfer process and that administrative
reforms to reduce transaction costs could improve adaptability to the effects
of climate change.
Finally, permanent water transfers are not particularly effective in promoting
flexible adaptation to climatic variability or uncertain climate changes. Small,
temporary transfers through water banks such as California's Emergency Drought
Water Banks would provide greater flexibility (see Section
15.3.2.3).
Although well-functioning water markets may ameliorate the socioeconomic impacts
of reduced water availability, they cannot completely eliminate the adverse
impacts of a drying scenario. Using models that assume optimal allocation of
water across all sectors (which implicitly assumes perfect, cost-free water
markets), Hurd et al. (1998) estimated the water resources-related costs
of climate change scenarios for four major river basins in the United States.
They found that losses from moderate and severe drying scenarios tended to be
greater in the semi-arid western United States than in the eastern states. From
this analysis, they project that national water-related welfare losses arising
from a temperature increase of 2.5°C coupled with a 7% increase in precipitation
would be on the order of US$9.5 billion. A scenario with a temperature increase
of 5°C coupled with no change in precipitation would result in losses of
US$43 billion. Overall, they found that the economic costs probably would be
dominated by impacts on water quality and instream nonconsumptive water uses,
especially hydroelectricity generation. This result hinges on their assumption
that irrigators—who currently dominate ownership of water in the western
United States—would benefit by selling some of their water to other sectors.
More realistic assumptions regarding the costs of transferring water through
water markets would have produced larger estimated losses and a different distribution
of losses across sectors.
Water rights are not always defined in terms that would permit the transfer
of a specific amount of water from one use to another, particularly in eastern
U.S. and Canadian jurisdictions that still follow a traditional riparian system
of water law (Tarlock, 1989; Flood, 1990; Scott and Coustalin, 1995). In such
areas, accommodation of competing demands and changing supplies will require
local and regional planning and coordination. For example, if the levels and
outflows of the Great Lakes-St. Lawrence system decline, as most available
scenarios suggest, adaptation options are likely to raise sensitive interjurisdictional
allocation issues and may require infrastructure investments that will increase
the need for cooperative planning and management of the basin's water resources
(Bruce et al., 2000).
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