Decision Support for the (Inter-)Basin Management of Water Resources Using Integrated Hydro-Economic Modeling

The development of adequate modeling at the basin level to establish public policies has an important role in managing water resources. Hydro-economic models can measure the economic effects of structural and non-structural measures, land and water management, ecosystem services and development needs. Motivated by the need of improving water allocation using economic criteria, in this study, a Spatial Decision Support System (SDSS) with a hydro-economic optimization model (HEAL system) was developed and used for the identification and analysis of an optimal economic allocation of water resources in a case study: the sub-middle basin of the São Francisco River in Brazil. The developed SDSS (HEAL system) made the economically optimum allocation available to analyze water allocation conflicts and trade-offs. With the aim of providing a tool for integrated economic-hydrological modeling, not only for researchers but also for decision-makers and stakeholders, the HEAL system can support decision-making on the design of regulatory and economic management instruments in practice. The case study results showed, for example, that the marginal benefit function obtained for inter-basin water transfer, can contribute for supporting the design of water pricing and water transfer decisions, during periods of water scarcity, for the well-being in both basins.