Climate Change and Its Implications for New Mexico's Water Resources and Economic Opportunities

Social, economic and environmental systems in waterscarce New Mexico and throughout the arid southwest are vulnerable to disruptions in water supplies that are likely to accompany future climate changes. With a particular focus on potential economic consequences for New Mexico, this study uses a hydro-economic model of the Rio Grande watershed to integrate plausible changes in climate with hydrologic responses and water demands within a framework that optimizes wateruse allocations for the greatest economic benefit. The study uses three climate change scenarios across two future time periods selected to represent the range of effects indicated by the outputs across eighteen global climate models (GCMs) using the SRES A1B emissions scenario. These six climate change scenarios were then used to model runoff changes using the WATBAL hydrologic model (Yates, 1996), which integrates climate and hydrologic variables, and to change water demand parameters in the hydro-economic model. Primary findings confirm that ecosystems are at greatest risk in New Mexico, followed by agricultural water users, as water is increasingly transferred to maintain urban and industrial users, whose economic productivity is greater. While total annual economic losses are estimated in the vicinity of $300 million, under severe climate changes, where runoff is reduced by nearly 30%, both economic and non-economic losses are likely to be significantly higher. This is due primarily to the effects of some strongly optimistic model assumptions, e.g., assuming no conflicts over water rights or water transfers, and to several significant and valuable omissions in the analysis, e.g., the environmental and social services that agriculture and the environment provide. INtROduCtION New Mexico has a unique blend of cultures and landscapes, of agrarian values and high-tech economies, of rare ecosystems, fertile valleys and expansive desert rangelands. It is a place where people have long settled and where growing numbers still long to settle, as migration trends illustrate. New Mexico’s growing communities are praised for their quality of life, climate and retirement opportunities. The Rio Grande Valley, which bisects New Mexico, has industry, tourism, residents old and new, and agriculture, all of which stake claims to water resources. These water resources must also serve the traditions and economic needs of twenty-three Native American tribes and pueblos, and flow through traditional acequias—canals—felt by many to be the lifeblood of four-hundred-year-old Hispanic communities. The Rio Grande is also home to endangered silvery minnows in the last remnant of their historical habitat and to flocks of migrating cranes and geese who gather in vast numbers to rest and refuge in riparian bosques (woodlands). Technical Report 45 brian H. Hurd and Julie Coonrod1 1 Respectively Associate Professor (bhurd@nmsu.edu), Department of Agricultural Economics and Agricultural Business, New Mexico State University, Las Cruces, New Mexico 88003, and Associate Professor (jcoonrod@ unm.edu), Department of Civil Engineering, MSC01 1070, University of New Mexico, Albuquerque, New Mexico 87131. table of