This document summarizes research on optimizing economic returns and ecosystem services from farm landscapes reliant on groundwater irrigation. The research used models to determine: 1) Maximum economic returns and levels of groundwater, water quality, and greenhouse gas reduction services. 2) Crop mixes that balance returns and each service along "efficiency frontiers". 3) Financial values for points on the frontiers, finding reservoirs increased returns up to 10% for the same ecosystem service value. 4) Conservation policies to boost services had varying costs, with some generating social value gains up to 30% more than single objectives.

1. Aligning Economic Returns and
Ecosystem Services for a Spatially
Delineated Farm Landscape Reliant on
Groundwater for Irrigation
Kent Kovacs, Kuatbay Bektemirov
71st SWCS International Annual Conference
July 24‐27, 2016
Louisville, KY

2. Introduction
What are the possibilities of achieving important
ecosystem service objectives while also generating
reasonable economic returns?
Optimization determines:
• economic returns for the landscape given the crop
(rice, soybeans, corn, etc.) and irrigation choices
• groundwater supply, surface water purification, and
GHG reductions
• maximum economic returns for a given value of the
ecosystem service(s) provided

4. Greenhouse
gas reduction
Surface water
purification
Groundwater supply

5. Irrigation storage
reservoir
Tail-water recovery
structure
Aquifer

7. _ _( 1) _
m
i t i t ik k t ik
AQ AQ p GW nr  
• Aquifer stock
_ _ _j ij t i t i t
j
wd L GW RW 
• Water balance
_ _ 0ij t ij
j j
L L 
• Land balance
Dynamics of land and water use

8. Economic returns objective
Profit w/o
irrigation
costs
Reservoir
construction
cost
Reservoir
water
pumping
cost
Ground
water
pumping
cost
 _ _ _
_ _ _ _ _
, ,
1 1 1
max :
ij t i t i t
T m n
r rw
t j ij j ij t iR t i t i t i t
L RW GW
t i j
pr y ca L c L c RW GC GW
  
   
 
 
 
 

9. Ecosystem service objectives
• Greenhouse gas reductions
• Surface water purification
• Groundwater supply from the landscape
  _ _ _, ,
_ _
1
max :
ij t i t i tL RW GW
T
m
c t c i t i ti
t
V p S E

  
 
_ _ _, ,
_ _ 1
1 _
max :
ij t i t i tL RW GW
i t i tT
i k
w t k k
t k i t
i k
EX EX
V hh wtpq
EX





  
  
   
  
  

 

  _ _ _, ,
_ 1 _
1
max :
ij t i t i tL RW GW
T
m
g t bv i t i ti
t
V p AQ AQ 

  

10. Efficiency frontiers
• Optimize the ecosystem services objective without
restriction on economic returns. Optimize
economic returns objective without restriction on
ecosystem services.
• Maximize economic returns for given ecosystem
service values to find combinations that rest on the
efficiency frontier.

11. Results Outline
• Ecosystem service and economic return values for points along frontiers
• Crop mix patterns along frontiers that show the tradeoff of economic
returns and…
- All ecosystem services
- Groundwater supply value
- Water purification value
- Greenhouse gas reduction value
• Present value (PV) of ecosystem services and economic returns for
select points along frontiers using…
- All ecosystem services
- Groundwater supply value
- Water purification value
- Greenhouse gas reduction value
• Economic costs resulting from conservation policies that increase
ecosystem services for the landscape with reservoirs

12. Ecosystem service and economic
return values for points along
efficiency frontiers
Without reservoirs With reservoirs
Frontiers
Present value of
Frontiers
Present value of
economic
returns
ecosystem
services
economic
returns
ecosystem
services
A 1649 1532 F 1649 1532
B 2768 1000 G 3021 1000
C 3021 819 H 3322 819
D 3322 567 I 3656 567
E 4559 -2345 J 4757 -2206

13. Crop mix patterns along frontiers that
tradeoff all ecosystem services
With reservoirs
Without reservoirs

14. PV of ecosystem services for frontiers
using all ecosystem service value
Ecosystem
services
Without reservoirs With reservoirs
A C E F H J
Water purification 32 21 -1 32 19 -2
Groundwater
supply
60 27 -68 60 41 -56
Greenhouse
gases
1439 771 -2276 1439 760 -2147
Total ecosystem
services
1532 819 -2345 1532 819 -2206

15. PV of economic returns for frontiers
using all ecosystem service value
Land cover
Without reservoirs With reservoirs
A C E F H J
Rice 0 0 769 0 0 932
Irrigated soybeans 0 121 674 0 21 698
Non-irrigated crop 0 543 625 0 477 587
Corn 0 1300 1940 0 1953 2081
Cotton 0 54 430 0 21 439
CRP 1649 1003 121 1649 851 20
Total economic
returns
1649 3021 4559 1649 3322 4757

16. Crop mix patterns along frontiers that
tradeoff groundwater supply value
With reservoirs
Without reservoirs

17. PV of ecosystem services for frontiers
optimizing groundwater buffer value
‐620
‐672
50
2
885
813
50
22
‐700 ‐500 ‐300 ‐100 100 300 500 700 900
Total ecosystem services
Greenhouse gases
Groundwater supply
Water purification
m$
Without reservoirs L
With reservoirs Q
‐1178
‐1167
‐10
0
‐450
‐442
‐10
2
‐1200 ‐1000 ‐800 ‐600 ‐400 ‐200 0
Total ecosystem services
Greenhouse gases
Groundwater supply
Water purification
m$
Without reservoirs N
With reservoirs S

18. PV of economic returns for frontiers
optimizing groundwater buffer value
4169
23
386
1952
817
290
702
4638
25
437
2079
646
634
816
2539
1058
16
521
945
0
0
4118
360
423
1959
937
315
125
-50 450 950 1450 1950 2450 2950 3450 3950 4450
Total economic returns
CRP
Cotton
Corn
Non-irrigated crop
Irrigated soybeans
Rice
m$
Without reservoirs N
Without reservoirs L
With reservoirs S
With reservoirs Q

19. Crop mix patterns along frontiers that
tradeoff water purification value
With reservoirs
Without reservoirs

20. PV of ecosystem services for frontiers
optimizing water purification value
Ecosystem
services
Without reservoirs With reservoirs
V W X AA BB CC
Greenhouse
gases
-1506 -1671 -1858 -1340 -1509 -1697
Groundwater
supply
-45 -51 -57 -32 -37 -43
Water purification 25 23 19 25 23 19
Total ecosystem
services
-1526 -1699 -1895 -1348 -1524 -1720

21. PV of economic returns for frontiers
optimizing water purification value
Land cover
Without reservoirs With reservoirs
V W X AA BB CC
Rice 739 746 758 887 904 924
Irrigated soybeans 547 587 625 556 601 635
Non-irrigated crop 347 377 440 319 362 419
Corn 1574 1685 1778 1675 1788 1898
Cotton 233 265 311 228 260 307
CRP 518 443 348 438 346 246
Total economic
returns
3957 4102 4260 4102 4260 4429

22. Crop mix patterns along frontiers that
tradeoff greenhouse gas reduction
value
With reservoirs
Without reservoirs

23. PV of ecosystem services for frontiers
optimizing greenhouse gases value
518
478
28
11
516
478
25
13
‐50 50 150 250 350 450 550
Total ecosystem services
Greenhouse gases
Groundwater supply
Water purification
m$
Without reservoirs HH
With reservoirs MM
1276
1200
49
28
1269
1200
41
28
‐50 150 350 550 750 950 1150
Total ecosystem services
Greenhouse gases
Groundwater supply
Water purification
m$
Without reservoirs FF
With reservoirs KK

24. PV of economic returns for frontiers
optimizing greenhouse gases value
2456
1354
15
1087
0
0
0
3708
628
134
2076
604
266
0
2319
1386
15
853
63
2
0
2961
796
374
0
907
856
28
-50 450 950 1450 1950 2450 2950 3450
Total economic returns
CRP
Cotton
Corn
Non-irrigated crop
Irrigated soybeans
Rice
m$
Without reservoirs HH
Without reservoirs FF
With reservoirs MM
With reservoirs KK

25. Economic costs of conservation policies
that increase ecosystem services for
the landscape with reservoirs
0
0.1
0.2
0.3
0.4
0.5
0.6
Economic cost per dollar of
ecosystem service value gained ($)
Conservation policies
Cost‐share reservoir
construction costs
Tax on ground‐
water
Total maximum
daily load
Carbon credits

26. Conclusions
 Conjunctive water management increases economic
returns up to 10% for any given value of ecosystem
services.
 A compromise among economic return and
ecosystem service objectives usually generates
more social value up to 21% without reservoirs and
30% with reservoirs than directing the landscape
exclusively to one objective.
 All conservation policies increase social value but
some do so at greater economic cost.