Select Findings from Reservoir Economics Analysis
The federal reservoirs in the Willamette River Basin serve multiple purposes, including flood risk reduction, reservoir recreation, and downstream flow augmentation. At certain times of the year, however, these uses compete with one another, and the value that society places on these competing uses should be considered in management decisions for water allocation. This section describes the expected changes in value for reservoir recreation and flood risk reduction over the next century.
Reservoir Recreation Benefits
Our modeling results indicate increasing shortfalls from full storage at the beginning of summer over time, particularly under warmer climate scenarios, as well as greater summer drawdowns as obligations to release water downstream for conservation flows or contracted stored water are increasingly unmet by natural inflow (Fig. 1).
Lost recreational benefits resulting from lowered summer (June-August) water levels are estimated to increase from an average of $5 million per year over most of this century to more than $12 million toward the end of the century under the Reference Case scenario (Fig. 2). Under the warmest climate scenario, average annual losses increase to almost $13.5 million during the last two decades of the century (Fig. 2).
Figure 1. Average shortfall from full summer storage by decade for the High Change Climate scenario.
Figure 2. Reduction in recreational benefits due to reservoir drawdown.
Flood Risk Reduction Benefits
Current benefits from flood risk reduction are estimated at more than a billion dollars annually (Fig. 3).
These benefits are expected to triple by 2100 under the Reference Case scenario, while under the High Population scenario, the projected benefits increase more than five times (Fig. 3).
Figure 3. Estimated flood risk reduction benefits from January through May under the Reference Case and High Population scenarios.
Losses in recreational benefits, associated with lowered summer reservoir water levels, are expected to increase from an average of $5 million per year over the first half of this century to more than $12 million by the end of the century. However, since the reservoirs are managed for both flood control and stored water uses, these projected recreational losses should be tempered against the estimated value of flood risk reduction. We estimate current flood control benefits at more than a billion dollars annually and expect these benefits to triple by 2100 with economic growth and urban expansion. Thus, there is a strong economic rationale to keep reservoir fill low as long as flood risk is high at the beginning of each calendar year, before beginning to fill for storage.