The availability of water for sustainable human development and healthy functioning of Earth's ecosystem has never been more pressing an issue than it is today. Skyrocketing demands for water for industry and agriculture, coupled with decreasing availability of freshwater resources due to unsustainable usage, necessitate novel and effective water resource management strategies.

On May 6, 2010, the NYAS Green Science & Environmental Policy Discussion Group, in partnership with the Columbia University Water Center, hosted a discussion on "The True Cost of Water." The meeting focused on the importance of economic optimization of water usage to establish long-term sustainability of water resources. Among the needs for water resource management are the desirability of achieving equitable distribution of scarce water among communities and the allocation of water among different industries such as power generation and irrigation. Upmanu Lall, Director of the Columbia Water Center, moderated the evening, which featured presentations by Michael Hanemann, Chancellor's Professor in the Department of Agricultural & Resource Economics at the University of California, Berkeley, and Gregory Characklis, Professor of Environmental Sciences and Engineering at the University of North Carolina.

Water is a unique commodity, due to its cultural significance, its ecological role, and the economics of the supply, as Michael Hanemann explained. Water is freely available in the environment and all people have access to some form of water, but the infrastructure that treats the water and delivers it to the user requires large capital investments. Hanemann discussed the problematic cost structure of the water supply system and the difficulty of measuring the benefits provided by improved water supply and sanitation. These economic challenges are inherent in providing water, and are present in both developed and developing countries. Hanemann presented a case study of a dysfunctional system in Northern California to illustrate the complexities of sustainable water resource management.

Greg Characklis described how water resource planning can be improved with hydrologic and economic modeling in "Improving Water Management through Integration of Engineering and Economics." He first gave an overview of the current approaches to water supply management in the United States, contrasting the systems in the western states with those in the east. In order to meet the water demands of the growing population while maintaining viable ecosystems, these strategies need to undergo a transformation. Characklis gave several examples of innovative strategies developed for several water supply networks—including the Research Triangle and Central Coastal Plain areas of North Carolina and the Lower Rio Grande Valley in Texas. Each strategy is optimized to the lowest cost solution given the hydrology and water needs of the region.

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Gregory Characklis, PhD

University of North Carolina at Chapel Hill
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Greg Characklis is an associate professor in the Department of Environmental Sciences and Engineering at the University of North Carolina at Chapel Hill. His primary research interests involve integrated planning of water supply and treatment strategies through the consideration of both engineering and economic criteria. He also serves as an associate editor with the journal Water Resources Research and currently chairs a committee sponsored by the Association of Environmental Engineering and Science Professors entitled "Integrating Economic and Financial Principles into Environmental Engineering Research and Education." Prior to joining UNC, Characklis served as director of resource development and management at Azurix Corp., where his responsibilities centered around assessing the technical and financial merits of water-related investments. Before entering the private sector, he spent two years in Washington, D.C. as a fellow with the National Academy of Engineering (NAE) where he co-authored a study on industrial environmental performance metrics and conducted work related to market-based reform of environmental policy. Characklis holds a PhD and an MS in Environmental Science and Engineering from Rice University and a BS from Johns Hopkins University.

Michael Hanemann, PhD

University of California, Berkeley
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Michael Hanemann is a Chancellor's Professor in the Department of Agricultural & Resource Economics and the Goldman School of Public Policy at the University of California, Berkeley. His interests include the environmental economics and policy, water, and climate change. He is recognized as one of the leading experts on nonmarket valuation and on the economics of water. He served as the California State Water Resources Control Board's economics staff from 1986 to 1990 (including the first three years of the Bay-Delta Hearings) and as its economic consultant in 1992–1993 for its Mono Lake Decision. He co-edited the standard textbook on Urban Water Management (McGraw Hill, 1998) and is co-author of the recent chapter on "Water and Sanitation," in Bjorn Lomborg (ed.) Global Crises, Global Solutions: Costs and Benefits Second Edition, Cambridge University Press (2009).

Hanemann directed the California Climate Change Center at University of California, Berkeley, which was established in 2003 to analyze policy issues relating to impacts of climate change on California, including those on water, agriculture, energy, human health, coastal resources and natural ecosystems, and economic policies for reducing carbon emissions in California. He co-directed the 2006 Climate Change Scenarios Project for the state of California and served on the steering committee for the 2009 Climate Change Scenarios Project. He is faculty co-director of the Climate and Energy Policy Institute at UC Berkeley Law School.

Upmanu Lall, PhD (Moderator)

Columbia Water Center
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Upmanu Lall is the Alan & Carol Silberstein Professor of Engineering in the Department of Earth and Environmental Engineering and Department of Civil Engineering at Columbia University. He is director of the Columbia Water Center and senior research scientist at the International Research Institute for Climate and Society. Lall is a leading expert on hydroclimatology, climate change adaptation, risk analysis and mitigation. His research has emphasized hydrology, water resource systems analysis, operations research and stochastic processes with applications to flood/drought risk and uncertainty assessment and the design and operation of water systems. He has pioneered the application of techniques from (a) nonlinear dynamical systems, (b) nonparametric methods of function estimation and their application to spatio-temporal dynamical systems, and (c) the study of multi-scale climate variability and change as an integral component of hydrologic systems. As new knowledge was created in these areas, he has focused on its application to water resources management through innovation in adaptive or dynamic risk management methods that can use information on the structure of climate for simulation or forecasting. Recently, he has become concerned with the issue of global and regional water sustainability, and the more general issue of modeling and managing planetary change due to coupled human and natural dynamics. He is developing technical and policy tools for the projection and management of environmental change as part of a quantitative approach to sustainability of earth systems.