Designing Watersheds for Integrated Development (DWID): A stochastic dynamic optimization approach for understanding expected land use changes to meet potential water quality regulations

Abstract

This study investigates the tradeoff between agricultural economic losses and potential water quality regulations at the watershed level over time. Specifically, we applied a stochastic dynamic mathematical programming approach to evaluate the impact of land use changes on agricultural economic losses under uncertain water quality regulations and crop yields. We selected the Little River Experimental Watershed in South Georgia as a case study. Seven potential water pollution reduction trajectories for total phosphorus (TP) were developed. The proposed model applied a chance-constraint technique to allow some degree of uncertainty in meeting the water quality standards. The result shows that agricultural profits decrease when uncertainties are considered at the watershed level. The findings further show that uncertainties of meeting the water quality standard expedited the land use transition from croplands to forestlands and magnified the share of forestlands, highlighting the crucial role of forests in managing water pollution in the selected watershed. The results also indicate that under a moderate pollution reduction scenario, an economic loss of $232/ha/yr is expected to achieve a 16 % reduction in TP concentration. In a more ambitious pollution mitigation scenario, agricultural economic losses are expected to be $778/ha/yr and may result in a 45 % decrease in TP concentration. The modeling approach developed in Designing Watersheds for Integrated Development (DWID) could easily feed into those policy deliberations which operate at the interface of economics and water-related policies for ensuring sustainable management of watersheds worldwide.