Modeling Water Resources Management at the Basin Level: Methodology and Application to the Maipo River Basin
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Limited water resources are increasingly constrained by growing water demand for agricultural,
industrial, and domestic uses, which in turn exacerbates environmental degradation
and water-quality problems. This research report develops and applies a comprehensive
decision-support tool for examining these issues at the river-basin level—the natural
unit of analysis for water allocation and use.
Authors Ximing Cai, Claudia Ringler, and Mark Rosegrant develop an integrated hydrologic–
economic river-basin model, simulating water flows, salinity balances, and crop growth
under water-allocation scenarios. One of the main advantages of the model is its ability to reflect
the dynamic interactions of essential hydrologic, agronomic, and economic components
and to explore both the economic and environmental consequences of a wide variety of policy
choices. Illustrating this, the authors use the framework to examine a variety of water-allocation
mechanisms and policy options for the Maipo River Basin in Chile. The method
developed here is relevant for other water economies and water-scarce river basins.
The study also presents, for the first time, a practical application of the highly complex and
changing relationship between system- and basin-level irrigation efficiencies, with important
implications for water-related investments. Finally, the report studies the role of economic incentives
in substituting scarce water resources for other farm-level crop inputs.
It is hoped that this model will assist water management authorities and policymakers in
choosing appropriate water policies and establishing reform priorities for water resource
allocation.