The monetary cost of water saved can be viewed as savings on the intensive margin

Geo-engineering proposals involve global scale interventions in the atmosphere and hydrosphere that would revert some of the changes in the total temperature distribution worldwide . In contrast, MCE is a small scale concept, aiming to tweak the temperature tail distributions where necessary rather than shifting the entire distribution year round. Many MCE technologies already exist and are used by growers, making sense both on the technical and economic dimensions. I believe many more examples are out there to be found, and many more will evolve as growers adapt to climate change.Respondents seem satisfied with CIMIS services. About 72% of respondents reported using CIMIS at least occasionally. The user types reporting “often” using CIMIS the most were Agriculture, followed by Golf Course Management and Water Districts. These user types are indeed likely to use CIMIS on a day to day basis, at least for some part of the year. In research and planning, on the other hand, one might use CIMIS to draw data only at an initial stage of a given task. In general terms, of the respondents who report using CIMIS to some extent, 77% say it is at least “moderately important” for their operations, with 22% reporting CIMIS as “extremely important”. The frequency of use and importance scores are positively correlated: frequent users also report high importance of CIMIS to their operations, which makes sense. The correlations between frequency and satisfaction, and between importance and satisfaction, seem less pronounced. There might be users who use CIMIS infrequently, perhaps because only a smaller part of their tasks involve the weather or climate information provided. Nevertheless, they seem satisfied with CIMIS services, as the satisfaction scores are relatively high. We also asked respondents to rank factors which hinder further use of CIMIS. Various answers were provided, given the results of initial surveys,blueberry packaging container and there was also room to specify other answers. Two main concerns exist, especially for users in agriculture: how reliable is the data and how to integrate it into existing systems and practices.

Many growers and consultants in agriculture complement CIMIS with other data sources, such as soil moisture sensors, irrigation logs, and flow meters. Integrating information from multiple sources into decision making is a challenge faced by virtually all growers.599 respondents, about a quarter of our survey, reported agriculture to be their primary business. Out of these, about half work on one farm, and the rest are consultants of sorts . 89% of respondents in agriculture report using CIMIS to some extent. Growers and consultants were asked to report their total acreage, selecting into pre-determined ranges. Summing these, we have 318,156 acres covered by growers, and almost 3 million acres covered by consultants. Many of the questions for growers and consultants were similar. One notable exception is regarding water use. The team decided not to ask growers how much water they use, fearing that growers would not want to share this information and would not finish the survey. However, consultants were asked how much water their clients use on average. This question was presented in the online survey as a slider bar, with a default at the lower bar , and an option to check a “Not applicable” box. This box was not checked very often. Instead, it seems like many consultants who did not want to answer this questions left the slider bar at the default value of 0.5 AF/acre. This is a very low value for irrigated crops, and we assume that all these responses are basically non-answers. Ignoring them, the average reported water use is 2.96 AF/acre per year . This seems like a very reasonable distribution for water use in irrigated crops. Indeed, the USDA’s most recent Farm and Ranch Irrigation Survey reports a total of 7,543,928 irrigated acres in California, with a total of 23,488,939 AF of water applied, and a resulting average water use of 3.11 AF/acre, only a minor deviation of the reported average. Given the responses from agricultural consultants, we seem to have captured a very large portion of the drip irrigated acres in California. As a baseline for valuation, we will use the total 2013 drip irrigated acreage from the USDA survey, 2.8 million acres. While some growers might use CIMIS with gravitational or sprinkler systems as well, our understanding of the qualitative and quantitative responses is that CIMIS is mostly important for drip.

We exclude the potential of CIMIS values on non-drip acreage, noting that our estimates would therefore be conservative in that sense.One can also consider gains on an extensive margin. The water saved by use of CIMIS is likely to be used in agriculture as well. This means more acres can be grown with the same initial amount of water. The “full” economic value of the water saved by CIMIS in agriculture is the value of agricultural output that can be produced with it on acres not irrigated before. This following analysis includes the economic value of growing alone, without the added values of post-harvest and economic multiplier effects, and probably a safe lower bound. We do not, however, include a counter-factual productivity of non-irrigated land. In California, this is probably range land or acreage that is too sloped for traditional irrigation methods, and therefore of very low economic productivity. With 1.92 million AF of water saved by CIMIS, and an average use of 2.5 AF/acre by growers , the savings from CIMIS can water an extra 768,000 acres in California. To put this in context, this is about double the total walnut acreage in 2016. Because of economic and technical constraints of water transport, it is hard to determine which crops would be planted in these extra acres. A conservative approximation assumes that the water saved by CIMIS serves to replicate the existing distribution of crops , taking the average value of productivity of an acre as the benchmark. The weighted average of grower revenue per acre in 2016 was $3,757 per acre1 . Multiplying by 768,000 acres, a conservative approximation for the contribution from CIMIS to California’s GDP via agriculture is about $2.89 billion. CIMIS allows for more precise irrigation, which means not only saving water but also increasing yields: water application can be adjusted to the plant requirements, which might depend on the weather and growing phase. We ask growers and consultants how does CIMIS contribute in increasing yields, ranking from 1 to 5 . How should we quantify these ranked contributions? Taylor, Parker, and Zilberman mention average yield effects of drip irrigation, ranging between 5% and 25% increase in output. This extra yield effect is explained by allowing for more consistent soil humidity and the precision of the irrigation.

This aspect of drip depends on weather and ET information, such as the one provided by CIMIS, to assess the water intake by plants and the appropriate amount of water required. We calculate an average yield effect of CIMIS by reconciling the respondent rankings with a portion of the yield effects from drip irrigation. For a lower estimate, rankings between 1 and 3 are attributed 0% yield effect,blueberry packaging boxes and the rankings of 4 and 5 get 5%. For a higher estimate, ranking of 1 gets 0% yield increase, ranking of 2 and 3 get 5% yield increase, and the rankings of 4 and 5 get a 10% yield increase. These percent yield effects are then averaged among the respondents. We aggregate growers and consultants with equal weights. 41% of respondents rank the importance of CIMIS for yield effects at 4-5. The low estimate for yield contribution of CIMIS results in 2% output increase, and the higher estimate at 5.9% increase. At a conservative estimate of per-acre income of $3,757 for growers, this represents an extra yearly income of $76 – $222 per acre. For the 2.8 million acres using drip irrigation, this would account for $213 – $622 million yearly from the contribution of CIMIS to yields. Assuming again the demand is elastic with a coefficient of -2, these estimates would halve to $107 – $311 million. These are gains from water saving in parks, golf courses, and gardens. They were assessed as a small portion of the total gains from CIMIS in the 1996 report by Parker et al., totaling about $2.3 million . Our current estimate for these gains is much higher. The discrepancy from the 1996 report is due to several factors. First, we believe to have reached out to more respondents in this sector. Second, water prices in California have gone up substantially. Third, there might be more use of CIMIS and smart irrigation planning in the sector compared to 20 years ago. We focus on responses from landscape managers and golf course managers. They report their operating acreage , the average water use, and the estimated saving rate by using CIMIS. We have 28 respondents in golf courses with 6,750 acres in total, and 137 respondents in landscape management with 179,000 acres. The total sum is about 21 times the acreage of the equivalent category in the 1996 report. Based on the initial interviews, we grouped them into a single user category, but still asked them to select into landscape or golf later in the survey. Table 2.2 proved us wrong. Surprisingly, it turned out that the users in landscape management reported much higher water saving rates with CIMIS. This could potentially be explained by technology: big turf areas are still likely to be irrigated with sprinklers, which allow lower savings rates even if CIMIS is used for optimal water calculations. On the other hand, a lot of non-turf landscaping might be irrigated with drip. The total amount of water, saved yearly with CIMIS according to our respondents, is 220,707 AF. Water prices for these types of users are much higher than in agriculture. We can use the municipal water rates to get an estimate of the monetary savings. The EBMUD rates, effective 2018, are $5.29 per 100 cubic feet or $4.12 for non-potable water. The Los Angeles Department of Water and Power charges commercial, industrial and governmental users by tiers.

For January 2019, the tier 1 rates are $5.264 per 100CF, and tier 2 rates are $8.667. The specific tier 1 allotment is set for each user. However, some non-profit users might get rates as low as $2.095 for tier 1 and $3.595 for tier 2. For comparison with agriculture, note that the lowest rate cited above for municipal water is more than four times higher than the “high” rate for agriculture in Taylor, Parker, and Zilberman . The spread of prices, even within municipalities, suggests that they might not reflect the marginal cost of providing water to consumers. However, water utilities have regulated rates and usually work on a “cost plus” basis, such that the water rates should reflect their real average cost. These rates can therefore be used to assess the economic gains from water savings. The different municipal rates serve to construct bounds for our estimates. This first order approximation does not take into account the potential elasticity in water demand, or the potential effect of CIMIS in lowering residential water pricing by curbing down demand. However, we think they are good benchmarks and could definitely serve as an estimate for order of magnitude. The lower rate is the LADWP non-profit rate, which might not apply for many CIMIS users. Assuming nobody exceeds their tier 1 allocation, the value of water savings amounts to $201 million per year. For a higher EBMUD rate of $5.29, the savings amount to $509 million per year. For a reasonable upper bound, assuming we are in Los Angeles and 90% of the water consumption is in tier 1 , the sum is $539 million. Unlike the case of agriculture, we do not believe the survey responses in this category have captured all the relevant acreage. Neither do we have a good sense of the total relevant acreage in California, which could indicate by what factor these estimated gains could be extrapolated. However, the sums are substantial as they are. We take them as our total estimates for gains from CIMIS, noting that they are an under-estimate in this sense. This chapter analyzes the gains from CIMIS, focusing on agriculture and some urban uses.