Projects Funded for Mehdi Nemati


Sharing Colorado River Water: Past Apportionments, Current Demands and Feasibility of Potential Allocations and their Welfare Consequences

Mehdi Nemati


Proposed Objectives of the Project:
Develop a Colorado River Basin (CRB) wide hydro-economic model that provides stakeholders, policymakers, and constituent organizations with a lens to view the changes coming to the Colorado River Basin in the 21st Century through both economic policy and climate modifications.

Summary of Results:
The hydro-economic analysis is a valuable tool for addressing water management concerns, and the hydro-economic model of the Colorado River Basin (CRB) is a prime example of this. The model integrates physical, hydrological, and economic elements in a framework that captures the spatial and temporal relationships of the water system. Specifically, the hydro-economic model of the CRB includes agricultural production and water use, urban water use, water used for hydropower production, and environmental water use through environmental flow restrictions. Various levels of governance are represented in the model to ensure that the hydro-economic model of the CRB is responsive to the needs of the basin's decision-makers. This includes decision-makers at the country level (U.S. and Mexico), state level, Tribal Nation level, and smaller levels such as irrigation districts and urban centers. By including decision-makers at various levels, the model can provide insight into the economic and hydrological implications of water management decisions across the CRB.

The hydro-economic model results for the CRB provide a comprehensive view of the agricultural sector in the basin. The irrigated land in the model covers 2.6 million acres, which are distributed across 25 irrigation districts in the seven states. The model takes into account the irrigation of 39 different crops, categorized under three distinct irrigation systems: flooding, sprinkler, and drip. The agricultural sector in the CRB is a significant water user, diverting 8.9 million acre-feet of water that generates $1,773 million in net income. The states of Arizona, California, and Colorado account for 84% of water use and 90% of net income. On average, net income across the basin is $680 per acre, with the range per state varying from $200 to $1,200 per acre. The model highlights that 60% of cropland produces 90% of the net income and that 6% of the higher-value crops account for 40% of the total net income in the basin. Additionally, the model shows that 10% of water use in the basin generates 50% of the total net income, with a shadow price of $270 per acre-foot. These results suggest that there is potential for improving water use efficiency through interstate water exchange.

The hydro-economic model also includes the urban centers in and outside the basin that the Colorado River serves. The model encompasses a total of 379 cities with a population of 33.4 million inhabitants. The urban sector uses an estimated 525,000 acrefeet of water for domestic purposes, generating an economic surplus of $18,328 million. In addition, the non-domestic use of water in the urban centers is estimated to be 787,000 acre-feet. Therefore, the total urban use included in the model is 1.3 million acre-feet. The lower basin has the highest concentration of population, with California and Arizona representing 75% of the population and 86% of the economic surplus. These results highlight the significance of the urban centers in the basin's hydro-economic model and their role in determining the overall water use and economic impact. By including domestic and non-domestic water use in urban centers, the model provides a comprehensive view of the urban sector's water use in the CRB.

Finally, the hydro-economic model includes a hydropower production capacity of 4,223 MW, representing approximately 95% of the installed capacity in the basin. The nine largest hydropower plants in the basin produce 10,225 GWh annually, generating an annual benefit of $874 million. However, the three largest plants account for 84% of the total benefits. It's worth noting that hydropower production also helps to reduce greenhouse gas emissions. The hydropower production in the basin has avoided emissions of approximately 12,300 million lbs of CO2e. These results highlight the importance of hydropower production in the CRB's hydro-economic model, not only for its economic benefits but also for its contribution to mitigating climate change by avoiding the emission of greenhouse gases. The model provides a comprehensive view of the hydropower production in the basin, which can be helpful for decision-makers to optimize the use of this valuable resource.

As a next step, the project uses the hydro-economic model to evaluate potential policy changes to the current operation of the CRB, providing much-needed informationon the likely economic effects of different policy interventions may be on the CRB.


The Impacts of Wildfires on Water Utilities and Communities in California

Mehdi Nemati and Samane Zare


Specific Objectives of the Project:

  • Assess water utilities wildfire risk, with a specific focus on rural and agricultural communities;
  • Establish an association between water utilities’ vulnerability level to wildfires with water utilities’ and communities’ characteristics; and
  • Estimate short- and long-run effects of wildfires on households’ bottled water and water purifying products purchases, with a specific focus on rural and agricultural communities.

Summary of Results:
The project is completed for the first and second objectives, and a paper is submitted to the Journal of Water Resources Management. For the third objective, data is collected and merged/cleaned, but we are still working on refining the results. We do not have a working paper for this objective yet. Summary of the results from the first and second objectives are listed below.

Wildfires have occurred more frequently and are more devastating in California, and quantifying their impact on water utilities, which potentially may lead to water availability and water quality threats, is essential. This is especially important for water utilities whose characteristics are susceptible to wildfires. Due to the unpredictable nature of wildfires, drinking-water utilities face a considerable challenge in developing plans and strategies for managing floods and treating polluted water. Information and tools are needed to help water storage and treatment managers better prepare for the impacts of wildfires.

Our study quantifies these impacts by measuring the effects of wildfire on each water utility service area, based on the exposure frequency and the extent of acres burned by wildfires that occurred in each water utility service area, and by calculating the severity of the wildfire. Our quantitative models take into account the nature of the censoring and selection biases on wildfire data and show an association between water utility characteristics and the level of vulnerability to wildfire risks.

As a result of the cross-sectional estimation of the OLS, Tobit, and Heckman models, we found that wildfire severity increased in areas of (1) government-owned utilities vs. private-owned utilities; (2) utilities relying on surface water vs. those relying on groundwater; (3) utilities relying on local water sources vs. those relying on purchased water; (4) utilities located in Southern vs. Northern California; (5) utilities located on the coast vs. inland California; and (6) utilities in highly populated areas vs. non-populated areas.

Our findings can potentially inform public land managers and water utilities by identifying which water utilities are most vulnerable to wildfires based on their characteristics. They also show the potential characteristics of water utilities that are highly likely to experience changes in potential water availability and quality degradation immediately following a wildfire. Our research reveals that utilities more vulnerable to wildfires will require more strategic management decisions. It also suggests that the countermeasures on wildfires should be different depending on the characteristics the utility has. For example, based on an assessment of wildfire severity, by identifying the utilities and their locations of greatest risk, the relevant institutes could set costs associated with wildfire damage and mitigation activities.

Wildfire management and reducing the risk of wildfires are problems not only for the U.S. Forest Service or other public land management utilities but many other entities, such as water utilities. To help solve this pressing issue, partnerships are needed to help identify landscapes with hazardous vegetation and implement effective land management strategies by federal, state, local municipalities, communities, and nongovernment utilities. From this point of view, our study findings may help inform public land managers about possible shared stewardship partnerships with water utilities to leverage resources and expertise to reduce hazardous vegetation on shared landscapes, thus reducing wildfire risk.


Unpacking Residential Water Consumption and the Impacts of Nudges: A Machine Learning Application

Mehdi Nemati


Specific Objectives of the Project:
1. Disaggregate residential water consumption to indoor and outdoor usage using machine learning methods.
2. Estimate effect of HWURs on indoor and outdoor water consumption (obtained in the first objective).
3. Estimate the impact of HWURs on peak hour and day water consumption.
Analysis of the data revealed that we could not analyze objectives two and three using hourly data (the hourly data started around the same time the HWURs program launched). Instead, we use daily data to perform the analysis for objectives 2 and 3. Additional analysis is done to identify rebound effects and it is heterogeneity after the CA water mandate in 2015.

Project Report/Summary of Results:
Increased frequency and severity of droughts and rapidly growing populations increase the stress on water resources in many arid and semi-arid regions worldwide, such as the Western United States. In response to these evolving realities and their associated challenges, water providers often use demand-side management via conservation and efficiency to buffer against short-term water supply shortfalls. The implementation of a smart water metering system in the medium-size water utility in Northern California in 2014 allowed the water utility to record the hourly water consumption of all its customers. This data availability has enabled a large-scale research project to proceed with the aim to disaggregate residential daily water consumption to indoor (e.g., shower, washing machine, etc.) and outdoor (e.g., irrigation) components. Such information can guide the development of alternative tariff structures and other demand management initiatives to reduce peak demand which is a critical parameter for water infrastructure planning and design. We also contribute to the literature on social and economic patterns of water use rebound after the 2015-2016 CA water mandate.

We use hourly residential water consumption data (more than 500 million data points) between 2015-2019 medium-size water utility in Northern California to identify the peak/off-peak use hours and gain insights into how it changed once mandatory restrictions were lifted in June 2016.

Our results illustrate the peak use hours are between 1-5 am, but its distribution changed dramatically after the drought in 2017-2019. There was a shift in the peak hour of consumption from morning (6 am) to the early mornings (4-5 am). Water use distribution became narrower, with decreases in standard deviations while increases in means. Our results also indicate that the water use rebound from the mandate period was 2.8 gallons/hour, which equals 31% of average hourly water use during the mandate period (8.97 gallons/hour). The rebound varies considerably by the hour, season, and consumption, and income levels. This was the highest level of consumption of a day. The highest rebound at 5 am was 11.53 gallons/hour, followed by a rebound at 4 am of 11.40 gallons/hour. The rebounds were noticeably flat during 4 pm-1 am, with a range of 1.08-3.23 gallons/hour. Interestingly, we found that the rebounds were negative during 8 am-2 pm, with the largest rebound of -0.88 gallons/hour. The results showed that the rebound in summer was four times higher than that in Winter. Rebound in quintile five of consumption level was 6.34 gallons/hour while the rebound in quintile one was ten times lower than that.

The second part of our analysis is based on daily data from the same agency. This part estimates how web-based Home Water Use Reports (HWURs) affect household-level water consumption in a medium-size water utility in Northern California. The HWURs under the study share social comparisons, consumption analytics, and conservation information to residential accounts, primarily through digital communications. The data utilized in this part is a daily panel dataset that tracks single-family residential households from January-2013 to September-2019. We found that there is a 6.2% reduction in average daily household water consumption for a typical household who enrolled in the program. We estimate heterogeneous treatment effects by the day of the week, the content of push notifications, and baseline consumption quintile. For the latter, we provide an illustrative test to emphasize how mean reversion can severely bias a naïve panel data estimator for heterogeneous treatment effects when the source of heterogeneity is the outcome variable (e.g., consumption or expenditures). We find evidence that leak alerts are effective in reducing consumption immediately following the alert.