A Coupled Hydrologic-Economic Modeling Framework for Scenario Analysis

Abstract

To capture the interactions between hydrologic and economic systems necessary for modeling water quality at a sufficient level of spatial detail, we have designed a modular framework that couples an economic model with a watershed model. To represent the economic system, the Rectangular Choice-of-Technology (RCOT) model was used because it represents both the physical and monetary aspects of economic activities and, unlike traditional input-output or general equilibrium models, it can optimize choices among operational technologies in addition to the amount and location of production. For the first implementation of this modeling framework, RCOT is coupled with a watershed model, Hydrological Simulation Program-Fortran (HSPF), which was calibrated to represent Cedar Run Watershed in northern Virginia. This framework was used to analyze eight scenarios related to the expansion of agricultural activity in Fauquier County. The database for RCOT used county-level input-output data representative of the region in 2012. Thus, when crop farming was expanded to fully utilize the farmland available in the watershed, the nitrogen concentration at the outflow of the watershed increased from 0.6 to 4.3 mg/L. However, when RCOT could select between a standard and a more nitrogen-efficient management practice, the outflow nitrogen concentration only increased to 2.6 mg/L because RCOT selected the more resource-efficient practice. Building on this modular framework, future work will involve designing more realistic scenarios that can test policy options and regional planning decisions in a wide range of watersheds.