This dissertation is composed of three essays investigating three aspects of future water issues. The first essay focuses on an examination of water scarcity issues caused by rapid population growth and economic development in Texas. The second essay examines water scarcity under climate change scenarios in Texas. The third essay discusses arsenic-related water quality issues in the drinking water. An integrated economic, hydrological, and environmental model is developed for the first two essays by implicitly incorporating uncertainty about future climate, water demand from all types of water use, a spatial river flow relationship, interaction between ground and surface water, institutional regulations, and the possibilities of inter-basin water transfers (IBTs). In studying water scarcity under economic growth and population growth, we find that while some cities and counties have sufficient water, there are some other cities and counties (especially Dallas, Fort Worth and Austin) facing different degrees of water scarcity problems. In studying the climate change impact, four Global Circulation Models (GCMs) with three Special Report on Emissions Scenarios (SRESs) yield consistent results. Water scarcity becomes even more severe for cities. Texas realizes slight gains in earlier periods and a net loss beginning in 2060. This study finds that twelve IBTs, if there is no climate change, and fourteen IBTs, under the climate change scenario, will be economically feasible in 2060. These IBTs can not only greatly reduce water scarcity, but also create new growth opportunity for Houston. Water is transferred from in-stream flow in source basins. There is no significant impact on other sectors except in-stream flow and water flow out to bay. In the third essay, a two-stage structural model is developed to model household risk-averting behavior with respect to arsenic-related mortality risk in the drinking water. The empirical results suggest that risk perceptions for the parents and children are important in the decision of how much to spend on water treatment, but not in whether or not to treat water. Parents in our sample displayed mixed altruism. The information generated by this dissertation can help state agencies to manage water resources and to improve water-related human health, especially health for children, more effectively and more efficiently.

Thesis (PhD)--Stellenbosch University, 2013. / ENGLISH ABSTRACT: South Africa‟s hydrological and geographical characteristics, coupled with the location of a large part of its mineral endowment, required the development of the complex Vaal River Supply System, including inter-basin water transfer (IBT) projects which have been in operation for over twenty-five years. This research compares the actual water transfers of two such IBTs with their original, appraisal stage, predictions. Transfers are shown to be significantly less and also more variable than predicted. Further research reveals that the state of the receiving system has a large bearing on year-to-year decisions regarding transfers. Past appraisals, following what is called the Incremental Approach, do not adequately consider the likely future inter-basin transfer operating regime. Examination of six case studies, four South African, one Chinese and one Australian, shows that the Incremental Approach is still in general use – despite tools available for an improved approach. A new approach is proposed to upgrade estimations of variable costs associated with water transfers – often substantial life-cycle cost components of IBTs. The generally used unit reference value (URV) measure for appraising and ranking water resource projects in South Africa is also rooted in the economic theory of cost-effectiveness. This shows that the current approach is conceptually flawed; it fails to distinguish between water transfers and effectiveness outputs. The determination of the URV equation is expanded and improved. The upgraded appraisal approach, inclusive of the improved URV methodology, is named the Comprehensive Approach. A step-wise demonstration of the Comprehensive Approach is provided. Uncertainty regarding future water transfers and associated variable costs are provided for by stochastic simulation modelling. Decision analysis theory is applied to obtain the appropriate input value of variable costs. It is shown that the Comprehensive Approach can lead to an outcome significantly different from the Incremental Approach. The research provides new insights, placing water resource planning practitioners in a better position to recommend appropriate IBTs in future. These insights can also be transferred to the design of institutional and financial models related to IBTs, as well as the configuration and operation of supply systems including sea-water desalination projects. / AFRIKAANSE OPSOMMING: Suid-Afrika se hidrologiese en geografiese eienskappe, gekoppel aan die ligging van 'n groot deel van sy minerale bates, het gelei tot die ontwikkeling van die komplekse Vaalrivier Voorsieningstelsel, insluitend tussen-bekken oordragskemas waarvan sommige al vir meer as vyf-en-twintig jaar in werking is. Hierdie navorsing vergelyk die werklike wateroordragte van twee sulke oordragskemas met die oorspronklike vooruitskattings tydens die beplanning-stadium. Daar word getoon dat oordragte noemenswaardig minder en ook meer onreëlmatig was as wat voorspel is. Verdere ondersoek toon dat die stand van die stelsel, aan die ontvangskant, die besluitneming rakende die jaar-tot-jaar oordrag beïnvloed het. Historiese evaluerings het 'n “Inkrementele Benadering” (soos hier genoem) gevolg, wat nie voldoende die toekomstige bedryfsomgewing ten opsigte van tussen-bekken oordragte inagneem nie. Ondersoek van ses gevalstudies, vier Suid-Afrikaans, een Sjinees en een Australies, toon dat die Inkrementele Benadering nog algemeen in gebruik is, ten spyte daarvan dat hulpmiddels vir 'n verbeterde benadering beskikbaar is. 'n Nuwe benadering word voorgestel vir die verbetering van vooruitskattings van veranderlike koste wat met wateroordragte geassosieer word – dikwels 'n aansienlike gedeelte van die lewenssiklus-koste van sodanige skemas. Die Eenheidverwysingswaarde (EVW) maatstaf, wat algemeen in Suid-Afrika gebruik word om waterbronprojekte te beoordeel en in rangorde te plaas, word ook geanker in die ekonomiese teorie van koste-effektiwiteit. Daarmee word getoon dat die huidige gebruik van die EVW konsepsioneel gebrekkig is; dit tref nie 'n onderskeid tussen wateroordragte en effektiwiteitsuitsette nie. Die bepaling van die EVW vergelyking is verbreed en verbeter. Die opgegradeerde benadering, met insluiting van die verbeterde EVW metodiek, word die Omvattende Benadering genoem. 'n Stapsgewyse uiteensetting van die Omvattende Benadering word voorsien. Onsekerhede ten opsigte van wateroordragte en geassosieerde veranderlike koste word deur middel van stogastiese modellering aangespreek. Besluitnemingontledingsteorie word ingespan om die toepaslike insetwaarde van die veranderlike koste te bepaal. Daar word getoon dat die Omvattende Benadering tot 'n resultaat kan lei wat aansienlik verskil van wat met die Inkrementele Benadering verkry word. Die navorsing verskaf nuwe insigte wat die waterbronbeplanner in 'n beter posisie sal plaas om gepaste tussen-bekken oordragskemas voor te stel. Hierdie insigte kan ook oorgedra word na die ontwerp van institusionele en finansiële modelle rakende oordragskemas, asook die uitleg en bedryf van voorsieningstelsels, insluitend seewater-ontsoutingsaanlegte.