One can therefore calculate the significance levels for the test of whether the aggregate impact is significantly different from zero. The‐values suggest that the impact becomes significant around 2°C . Using the classification of IPCC, the study found that a negative impact is very likely for the +2°C and +3°C scenarios. As pointed out above, the coefficient on the degree‐days variables are less robust, however, similar results are obtained in a comparable study covering a larger geographical and climatic range gives comparable results. At the same time, the potential decrease in water availability appears to more damaging, especially for junior holders. This analysis studies how climatic variables and the access to subsidized surface water capitalize into farmland values, and how these values would be affected by changes in the climatic variables. Using a micro‐level data set of individual farms in California researchers examined how degree‐days, a non‐linear transformation of temperature variables, and related changes in water availability, capitalize into farmland values. This study found that the standard OLS approach underestimates the true variance‐covariance matrix of the estimator and therefore overestimates the significance of the regression coefficients, including those on the climate variables, because it incorrectly assumes that observations are identically and independently distributed. Nevertheless, the estimates of the impact of a change in water availability remain highly significant, even when allowing for spatial correlation or including random effects, though the significance is of course reduced relative to OLS. Similarly, coefficients on the linear and quadratic degree‐days variables are in line with what one would expect from agronomic studies,dutch buckets system but the estimates seem less robust to the inclusion or exclusion of non‐climatic control variables.
Researchers note also that the limited temperature variation in the study area makes estimation of the effect of temperature or degree‐days on farmland value somewhat problematic. The team has conducted a similar analysis for the eastern United States and found that extending this analysis to a larger area characterized by greater variation in temperature gives highly significant degree‐days coefficients that are comparable in magnitude to the ones presented here. The average magnitude of the impact of a potential decrease in water availability on farmland value appears to be larger than the one caused by an increase in temperature, because a decrease in water availability is harmful for all farms in California—a state that crucially depends on irrigation. On the other hand, the effect of an increase in temperature is mixed, ranging from modest benefits of an increase in temperature to potentially large damages in the Imperial Valley. Several caveats apply to this analysis. Perhaps the most important is that data on water rights is difficult to obtain, and the research team is continuing to develop finer and more accurate measures that might change the coefficient estimates. Moreover, the team’s current measure of water supply uses average annual historical deliveries; in future work, they will include measures of supply reliability that reflect the uncertainty facing water districts each spring, at the time cropping decisions are made. In addition, since the analysis relies on cross‐sectional data it does not pick up any potential changes not reflected in the data, most notably changes in prices, technology, CO2 fertilization, or the potential reduced water‐requirements through CO2 fertilization. “Among the many sessions of the Third World Water Forum, held in Kyoto, Japan in March 2003 , there was one titled Sedimentation Management Challenges for Reservoir Sustainability. Two main messages emerged from that session: Whereas the last century was concerned with reservoir development, the 21 st century will need to focus on sediment management; the objective will be to convert today is inventory of non-sustainable reservoirs into sustainable infrastructures for future generations.
The scientific community at large should work to create solutions for conserving existing water storage facilities in order to enable their functions to be delivered for as long as possible, possibly in perpetuity.” Reservoirs are one of the most common forms of nonrenewable resources, yet their economic studies have been rare. Engineering literatures emphasize that even when reservoirs were structurally sustainable,they could nevertheless become unsustainable due to sedimentation accumulation. The loss of storage due to sediment accumulation is nontrivial and alarming: Mahmood, K. reports that the annual capacity loss of worlds reservoirs due to sediment accumulation is about 1%, though White recently put this agure at 0:5%~1% . A world bank report translated the loss as the need to add some 45 km3 of storage per year worldwide, costing US$13 billion per year exclusive of environmental cost. China, which alone accounted for more dams construction than the rest of the world during 1950 1980,fairs worse, mainly due to the nature of sediment rich Yellow river. Zhou reported that China’s 82; 000 reservoirs are losing their capacity at the average annual rate of 2:3%. Three other frequently cited example of storage capacity loss are Welbedacht dam , Mangaho River project in New Zealand and Tarbela reservoir in Pakistan. If sedimentation issue is not taken care of properly, reservoirs needs to be abandoned after the sedimentation reaches a critical level.But sedimentated sites can’t be easily recycled for reuse. Such recycling efforts could be extremely costly. For example, according to Morris and Fan ,it would cost $83 billion to restore Lake Powell in Colorado river assuming one could and the disposal site to dump 33km3 of sand.Furthermore, there are not many proper sites for constructing reservoirs. Such sites certainly are not growing. Also, since the best sites costs were taken up earliest, alternative sites will be progressively costlier. These facts attest to the reservoir being nonrenewable resource. Ruud et al claim that Green House gases emitted from the reservoirs are positively correlated with the area cooded. In particular, reservoirs which food either upland forest or peat lands in Canada are likely to produce more GHG.
Studies like these further reduce the number of suitable sites for reservoir and provide further evidence of them being nonrenewable resources. There are at least 50000 dams in the world that are more than15m tall, as reported by International Commission On Large Dams . However, the total number of dams in the world is much more. In particular, given that only 7% of dams in the United States are more than 15m tall,using the same proportion, the total number of dams in the world could be more than 1 million.Lots of these dams are reaching their age. Furthermore, public’s perception of large dams as a clean source of energy is also undergoing transformation, and their decomissioning is more frequently discussed topics now than ever. At the same time, one needs a rigorous framework to calculate the economic value of dam at the time it is decomissioned so such decomissioning could be justified by judging it from some economically rational framework. Such value of the reservoir at the time of its decomissioning is the salvage value of the dam. From an operators point of view,the salvage value of dam is stochastic for several reasons: the impact of sedimentation on ecology and human health are not clearly understood.Tolouie reported that desiccated deposits of one sediments could be eroded and transported by wind,dutch buckets causing health hazard to nearby population. Furthermore, Chen et al reported that the presence of sediment against dam could constitute earthquake hazard. The impact of sediment accumulation on ecology alteration and the impact of delta deposition on the probability of flooding are also actively researched field. In legal front, Thimmes et al reviewed recent court decisions on cases against dam operators and found that courts have issued reward against dam operators for the ecological damage caused during the dam operations, and overall conclude that judicial determinations of reasonable reservoir management and reasonable precautionary measures by landowners are generally highly speculative, controversial, and based on limited information. Pansic et al report that currently three major costs associated with dam decomissioning include sediment management , environmental engineering and infrastructure removal . Furthermore, regulatory agencies may continue to impose new conditions on the operators as the new information on the impact of dams arrive, including their impact on Green House Gas stock in the atmosphere.The cost of decomissioning could very well be astronomical if stringent conditions are applied to the operators in the future, and this is consistent with the overall uncertain time dam operators are living in right now. It is clear that the periodical removal of sedimentation is an integral part of the operation of a sustainable dam.There are several techniques to remove sedimentation from reservoirs. We can roughly divide them into four types: erosion prevention, sediment routing, flushing and dredging. Erosion prevention can always be used with the latter. Erosion prevention schemes include watershed management issues such as encouraging people upstream to get involved in the practices that are not going to contribute to soil erosion . The other alternative is trapping sand before it reaches reservoirs; for example, by constructing check dams, though they are not very effective. These methods involve emptying reservoirs periodically or just before the flood. Flushing involves opening a low level outlet to temporarily establish riverine flow through which eroded sediment is flushed. Flushing is distinct from routing as the former deals with settled sediment and involves release of sediment at the season which is different from the season used by sediment routing which releases sediment when they arrive. The timing aspect of sediment release also makes flushing not very popular among environmentalists. Dredging involves mechanically digging up the coarse deposit and removing them from the reservoir.
A detailed description of these methods can be found in Morris and Fan and is also presented in the next chapter.The challenge in finding the optimal sedimentation technology is that any such prescription necessarily relies on the topography of the region and on such minute details as the size of sediment and hence an economic model has to make trade off between the accuracy of representation and simplicity of modelling so that one achieves desired tractability to come up with reasonable insights. Our goal in this paper is to formally represent the reservoir management problem, taking into account the stochastic nature of salvage value of the dam at the time of its decomissioning. The formalization also provides us the following three major insights: ranking of different sedimentation removal techniques from the perspective of their impact on the age of dam is facilitated. optimal sedimentation management is retrieved as a result of a control problem of the operator and the value of the dam at any point. At the end, we are also able to discuss sustainability issue of the reservoir. We contribute to the literature in the following way: this paper is the first one to look at the sedimentation issue in a stochastic framework. We provide detailed study of techniques and discuss qualitative properties of key thresholds that trigger different decision makings . We also provide a new method that slightly modifies Judd’s projection method in solving the nonlinear equations that results from optimizing decision of the operator. We use data from Tarbela dam in Pakistan to calibrate our model. We conclude that for some given cost functions, the dam could be sustainably run. Economic studies of sediment removal techniques so far have been very rare. In 2003, the world bank’s resource economics group developed a policy maker’s manual-type report, called RESCON. Their work provided a brief survey of sedimentation technique and a “look-up table” type Excel based software to facilitate the economic and engineering evaluation of different sedimentation strategies. Another work by Palmieri et al used the RESCON software to show impact of different sediment strategies on sediment removal policy and life of the dam. Huffaker et al provided a detailed economic study of hydrosuction dredging sediment removal system. In particular, Huffaker et al constructed a multi-state model of endogenous reservoir operations and apply singular perturbation solution methods that reduced dimensionality of the optimality system and facilitated the solution of the optimal system. They uncovered a phenomenon called “sediment perching” due to which increased sedimentation in the reservoir makes the sediment control mechanims more effective in the long term. Though they take into account the positive effect of sediment perching on dredging cost, they fail to note that sediment perching alters the natural pattern of sediment flow downstream and may cause undesirable environmental cost and their estimate of the benefit of sediment perching may therefore be upward biased.