Under the assumption that all the flow provided by the transaction meets an established flow need the simplest and recommended approach is to use the volume measure or acre-feet. The advantage of the volume measure is that can be compared to the entire flow need and provide a clear indication of progress made toward this need. If the flow rate were used it would only meet this objective if the flow rate were for the entire period. Securing 20 cfs for 30 days towards a 120-day need of 40 cfs provides an unclear measure of progress. In fact the benefit can be measured, but it would simply be to proportion the extent to which the 20 cfs meets the larger objective. Since this is essentially the same as calculating the additional volume generated by the transaction it is just simpler to use the acre-foot figure. And, finally, layer onto this discussion the issue of reliability. Unless the underlying water right is senior to all others the rate actually realized under a transaction may vary across the season of use that is transacted. In other words, in our example above, the 20 cfs might actually be 20 cfs one day and 10 cfs the next day. Again, subject to our assumptions it makes more sense then to add the 20 cfs to the 10 cfs and this means effectively adding daily volumes of water realized under the transaction. The dollars per volume of flow should be the primary basic cost-effectiveness metric.
6.4
OLUME VERSUS CONTRIBUTING VOLUME OR V CRITICAL PERIOD VOLUME
For cost-effectiveness analysis to be useful we want to be comparing like with like in terms of effectiveness. This is where the concept of additionality and the period of ecological significance arise. In order to warrant the expenditure of scarce conservation dollars the EWT should be providing additional flow/water that meets an established need. An established environmental flow need exists when studies have shown that a certain flow amount or flow range is beneficial for environmental purposes, whether for fish, wildlife or other purposes as discussed earlier in this report. If the need is already met, and the transaction provides flow on top of the target flow, this is not to say that such flow does not generate benefits. The question is whether that additional flow should be included as a benefit in the cost-effectiveness calculation. Arguably all units of flow are not created equal. The purpose of establishing flow/water targets is to define the environmental flow need. Once that is done, the flow generated by transactions should be measured against these targets in measuring the flow benefits for comparisons of cost-effectiveness. Wet water counted as a volume benefit should be water that contributes to meeting an established flow need. A variation on this approach occurs when there is a period of critical ecological significance. Typically this would be a period of time during which a flow target is of exceptional value for environmental purpose. For example, in the critical period for fish in our example above is the 30-day period that the 20 cfs transaction provides flow then we might not want to ascribe the same effectiveness to the other 90 days of flow provided by the second transaction (the 120-day transaction). In this case we may want to draw attention to the cost-effectiveness of these two transactions in meeting the critical period need. If both transactions cost the same amount of money per acre-foot of water acquired, then the shorter
Measuring Cost Effectiveness of Environmental Water Transactions
|
53