Dynamic multisector programing approach to regional water resource management

Abstract

Market forces have failed in the areas of development, allocation, and management of natural resources in general and water resources in particular. The shaping of public investment programs for the development of water resources has long been dominated by partial equilibrium analyses such as benefit‐cost analysis. However, this approach is rather limited for an interregional and intertemporal management program of water resources. The present study offers a multisector planning and management approach to water resources that is based on a general equilibrium analysis employing input‐output models and linear programing techniques. A dynamic multisector programing model that takes into account the sectoral, spatial, and temporal aspects of regional planning and an extension to an activity analysis model are formulated and applied empirically to California and the western United States for a 15‐year planning horizon. The results of the empirical application include water requirement forecasts, interregional water transfer requirements, efficient production and cropping patterns, ‘shadow prices’ for water and labor, and an optimal investment program for water resource projects. The use of a general equilibrium programing model has made it possible to investigate problems of regional development that are dependent on the interrelationships between resource availabilities and sectoral planning and has illustrated the importance of the complex interdependencies among economic variables.