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Conservation-Targeted Hydrologic-Economic Models for Water Demand Management

Y. Xiao1,2, L. Fang2,3*, and K. W. Hipel2,4,5

  1. College of Management and Economics, Tianji n University, Tianjin 300072, China
  2. Department of Mechanical and Industrial Engineering, Ryerson University, Toronto, Ontario M5B 2K3, Canada
  3. Department of Systems Design Engineering, University of Waterloo, Waterloo, Ontario N2L 3G1, Canada
  4. Centre for International Governance Innovation, Waterloo, Ontario N2L 6C2, Canada
  5. Balsillie School of International Affairs, Waterloo, Ontario N2L 6C2, Canada

*Corresponding author. Tel.: +(1) 416 9795000 Ext. 6410 ; fax: +(1) 416 9795265. Email address: (L. Fang).


Two basin-wide hydrologic-economic optimization models are presented to estimate how much water can be conserved while maintaining at least the same level of economic output. Water consumption is interpreted as either water diverted to consumptive users or water consumed by all users. Two different formulations for representing the two interpretations of water consumption are examined. The characteristics of different users, such as the consumption ratio and productivity, are considered. The models are applied to the South Saskatchewan River Basin (SSRB) in southern Alberta, Canada, where water scarcity is a severe issue. It is found that: a substantial amount of water can be conserved without sacrificing economic output; irrigation is the largest contributor while municipal and industrial (MI) users make a small difference in terms of water conservation; MI users make major economic contribution in order to retain the same level of system-wide aggregated benefits, and thereby overall water productivity can be considerably improved; MI users’ reactions are diversified depending on the specified conservation targets; and overall water conservation may be limited if MI users act independently. The implications of the results can be used to facilitate a better understanding of present water usage and guide policy makers into making informed decision for water demand management.

Keywords: consumptive users, demand management, optimization, productivity, water conservation, water policy

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