Assessing farmers' adaptation responses to water conservation policies through modular recursive hydro-micro-macro-economic modeling

Farmers' adaptation responses to water conservation policies involve a complex decision-making process that depends on a range of criteria, including water availability, profits, and risks, which are in turn dependent on (and might have consequences at) broader scale processes including water systems and the macroeconomy. The non-consideration of the complex interactions between and within natural and human systems often leads to unforeseen consequences and sub-optimal water policy design. There exists a fundamental need to improve our understanding of complex human-water (e.g. hydro-economic) and human-human (e.g. micro-macroeconomic) systems' interactions so to better inform policy-makers. This paper develops an innovative modeling framework for capturing the richness of interactions in complex human-water systems by: i) considering the rationale behind farmers' behavior and responses through microeconomic models; ii) assessing the complex interactions among economic sectors and regions within an economy through macroeconomic models; iii) simulating responses on water cycle dynamics within a river basin by means of hydrologic modeling; and iv) representing the interconnected dynamics and two-way feedback responses between human-water and human-human (through micromacro-economic) systems. The proposed modeling framework operates through a recursive modular approach built from independent modules which are, in turn, connected through a set of protocols that control the exchange of information. Methods are illustrated considering an incremental agricultural water charging policy in the Spanish part of the Douro River Basin (DRB). Results show that local land use reallocations have an impact on the supply of irrigated (rainfed) agricultural commodities at the macroeconomic level, which further leads to higher (or lower) commodity prices that partially offset changes in crop profitability due to changing water charges and readjustments in the crop portfolio. These, in turn, result in non-linear responses in land and water use with non-trivial impacts on water system's dynamics, where evapotranspiration, surface runoff, and groundwater evapotranspiration are the main hydrologic components affected. We conclude that the integration of hydro-micro-macro-economic modules through a set of protocols can provide crucial information for promoting the efficient design of agricultural water policies.