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Economic Currents

Keep up to date with the latest UHERO news.

Informing Water Policy in Hawaii with Transformative Interdisciplinary Research: UHERO’s Role in ʻIke Wai

UHERO's Project Environment will be leading the economic analysis for a new National Science Foundation project addressing critical gaps in the understanding of Hawaii’s fresh water supply that limit decision making, planning and crisis responses. ‘Ike Wai (from the Hawaiian ‘ike, (knowledge), and wai, (water) spans geophysics, microbiology, cyberinfrastructure, data modeling, indigenous knowledge and economics and connects university scientists to state and federal agencies and community groups.

Diversity in volcano age, eruption types, structural history, and hydrological features generate a complex subsurface water system that provides most of Hawaii’s potable water supply. While many hydrological studies have been carried out in Hawaii, relatively little is known about the exact structure of the many groundwater (GW) aquifers that are present throughout the state. Existing models are able to approximate the structure, but the accuracy of predicted water flows and sustainable yields for Hawaiian watersheds is limited by the availability of existing data, which is used to calibrate the models. Accordingly, ʻIke Wai will use new technology to measure the volume and interconnectivity of aquifers within Hawaiian volcanoes. Geophysical imaging will provide new high-resolution 3D maps of geologic structures. Real-time monitoring will support analysis of aquifer volume and hydraulic conductivity estimations. Flow and aquifer connectivity measurements will integrate three approaches: submarine GW Discharge (SGD) analysis, geochemistry and the innovative use of microbial diversity as a GW tracer.

Data and outputs from ʻIke Wai will provide decision-making tools to address challenges related to water availability and sustainability. Recent research on the West Hawaii coast has shown that we do not fully understand the size, flow rates, and boundaries of our groundwater aquifers. Without a clear understanding of how much water is available, we cannot properly plan future water use and management. There is currently significant debate over whether there is enough water to meet planned development while ensuring the biological and ecological integrity of surrounding nearshore habitats. ʻIke Wai will provide crucial geophysical data that will allow us to assess how much water is available to support both humans and nearshore environments.

Once we know the size, volume, and flow rates of groundwater aquifers, we can match these water supply estimates with current and projected demands for water. These demands come in the form of human demand — for domestic, commercial, agricultural, and municipal use — as well as biological and ecological demands — for example the dependency of nearshore organisms on freshwater discharge to the ocean, which is driven by the size and flow rate of up-gradient aquifers. The research from ʻIke Wai will help resource managers, policy makers, and the general public understand how scarce groundwater is in these areas, and how these resources should be priced, pumped, and managed to achieve the objectives that will be determined as part of our stakeholder engagement process. These objectives could be related to development, ecological integrity, and/or cultural integrity — we won’t know exactly what we are aiming for until we engage the stakeholders in our research.

The ʻIke Wai Initiative will give us a better sense of where the water is, how much is there, how much and where we can pump for what uses, and how we should best manage (price, restrict, require permits for, etc.) this resource. Stakeholder engagement and policy evaluation are also key components of the project, so we believe that the research results will not only be transformative from a scientific perspective but also useful for planning and management. Providing user friendly access to data and research results is an important objective of the project. Software engineers will work collaboratively with other members of the research team and stakeholders to create web and mobile applications for data dissemination, interaction and visualization.

For more information on the project, visit EPSCoR.

--Kimberly Burnett and Christopher Wada


Cost-Effectiveness of Controlling Invasive Miconia via Herbicide Ballistic Technology

Miconia calvescens is an invasive tree native to South and Central America that grows up to 50 feet with shallow root systems that promote erosion. The trees form thick monotypic stands, shading out native plants and threatening the watershed function of Hawaii’s forests. The quick growing miconia can mature in four years and produce 3 million seeds several times a year. It is thought that these seeds can remain viable for at least 18 years, and possibly much longer, before sprouting, potentially many more. Birds spread the tiny seeds when they eat the fruit, as do people when contaminated dirt or mud sticks to shoes, clothing, equipment, or vehicles.

Above: Herbicide is delivered via small purple pellet. Average treatment is 25 shots per plant.
Photo credit: Kimberly Burnett

Miconia was introduced to Maui in the early 1970s at a private nursery and botanical gardens near Hana, and now occurs in approximately 37,000 acres throughout East Maui. Maui Invasive Species Committee (MISC) has been managing Miconia for the last two decades, primarily through the use of ground crews and aerial treatment via long-line spray ball. Herbicide ballistic technology (HBT) was recently developed by Dr. James Leary (CTAHR, UH Manoa) as a way to complement these management strategies. The HBT platform delivers small amounts of herbicide into plant tissue from the air, allowing management in otherwise inaccessible locations. The herbicide is delivered via a small projectile fired from a device similar to a paintball gun.

Above: Getting a first-hand look at HBT operations in East Maui. L to R, Christopher Wada (UHERO), James Leary (CTAHR), Kimberly Burnett (UHERO).  Photo credit: Kimberly Burnett

UHERO’s Project Environment will be working with Dr. Leary to assess the cost-effectiveness of HBT technology relative to other management strategies. Key research questions include how to optimize frequency of surveillance, how to minimize the cost of reducing the population to a target level, where to focus HBT efforts (low density, isolated, high elevation/rainfall areas), and how to best combine HBT with other management strategies for maximum cost effectiveness.

--Kimberly Burnett and Christopher Wada

 

For more on the economics of Miconia from UHERO, see:

Economic impacts of non-indigenous species: Miconia and the Hawaiian economy

Invasive Species Control over Space and Time: Miconia calvescens on Oahu, Hawaii

Economic lessons from control efforts for an invasive species: Miconia calvescens in Hawaii

Prevention, Eradication, and Containment of Invasive Species: Illustrations from Hawaii

Control of Invasive Species: Lessons from Miconia in Hawaii

An Economic Assessment of Biological Control for Miconia calvescens in Hawaii


Economic Analysis of the Water-Energy-Food Nexus: My Visiting Research Fellowship at the Research Institute for Humanity and Nature in Kyoto, Japan

Posted July 30, 2015 | Categories: Blog, Project Environment

Earlier this year I had the opportunity to work with an interdisciplinary team at the Research Institute of Humanity and Nature (RIHN) on a Visiting Research Fellowship examining “Human-Environmental Security in Asia-Pacific Ring of Fire: Water-Energy-Food Nexus." Our objective was to design research frameworks for conducting water-energy-food economic analyses for three study sites in Japan: Obama, Beppu, and Otsuchi.

Synergies and tradeoffs among water, energy use, and food production should be considered by stakeholders and decision-makers looking to maximize the benefit from each resource. Economics can help to identify these tradeoffs by quantifying the benefits and costs of water, energy, and food-related projects over long planning horizons, as well as by optimizing allocations of these resources over multiple uses. During my research fellowship we developed frameworks for economic analysis of the water-energy–food nexus using examples from three case studies in Japan: water allocation over multiple uses in Obama, renewable energy production in Beppu, and construction of a dike in Otsuchi. Each of these case studies involves choices that will affect inherent linkages between water, energy, and food in each system. Failing to recognize these tradeoffs can result in sub-optimal allocation of resources with respect to the economy, the ecology, society and culture.

 

Obama is a city on the Sea of Japan in Fukui Prefecture, where groundwater is an important resource for a variety of uses including domestic use, melting snow, and fishery production (via submarine groundwater discharge). Over-allocation of groundwater towards above ground uses has implications on the important fishery resource near shore. An economically efficient solution is characterized by groundwater utilization paths over time that maximize net benefits across uses, explicitly considering how using water for one purpose reduces the availability of water for other purposes. Aside from the direct tradeoff between groundwater and the fishery, a key variable in the model is the price of energy, which affects the costs of both groundwater pumping and alternative snow-melting techniques. The team developed a bioeconomic optimization model that can be used to solve for optimal allocation of groundwater to each of these three uses over time.


Beppu is a city in Oita Prefecture best known for its high concentration of natural hot springs (“onsen”). Onsen are an important economic and cultural resource, whose use has significant implications on the surrounding society and ecology. Interest in small-scale renewable energy production using hot water and steam from the onsen (“onsen hatsuden”) has increased in recent years, especially following the Tokohu earthquake/ tsunami/ nuclear meltdown disaster of 2011. There are two primary types of onsen hatsuden being developed in Beppu: binary systems which are more productive but generate larger social and ecological damages, and the smaller scale yukemuri hatsuden which have a much lower production capacity but are less harmful to the surrounding ecosystem and society. We designed an economic approach to comparing the benefits and costs of each system.
 

Otsuchi is a small town in Iwate Prefecture in northern Honshu, one of the most impacted following the Tohoku disaster of 2011. Estimates of total economic losses from Tohoku range from $50-$210 billion USD. The research team developed an economic approach to assessing the benefits and costs of a government-financed dike being constructed with the intention of preventing similar losses following a natural disaster in the future. Benefits include the reduced risk of future losses, while costs include not only dike construction, operation and maintenance costs, but also loss of the groundwater connection between land and sea and the accompanying loss of mudflat habitat and associated oyster, abalone, and seaweed fisheries.

While the frameworks for the economic analyses have been developed, the science to properly parameterize the models is still being conducted at our three study sites. We will continue to improve our models and complete the analyses as more data becomes available. The 5-year/5-country (also U.S, Canada, Indonesia, and the Philippines) project will conclude in 2018.

Kimberly Burnett


PV Growth in Hawai'i?

Public comments regarding Hawaiian Electric’s PSIP and DGIP were due last week. Here’s a recap of what Hawaiian Electric has proposed for rooftop solar PV.

Hawai'i is characterized with small island electricity grids and some of the highest rates of solar PV penetration in the world. With over 10% of O'ahu households having PV, exceeding that of any mainland utility, the Hawaiian Electric Company and its subsidiaries have recently stalled the interconnection of new systems. The Hawai'i Public Utilities Commission ordered that further study be completed that might facilitate the adoption of more solar PV in Hawai'i. Along with circuit and power system upgrades, Hawaiian Electric's Distributed Generation Improvement Plan (DGIP) devises an alternative rate design that increases the interconnection fee and makes it more favorable to the utility to allow more households to install solar PV. Hawaiian Electric projects that DG customers could triple to upwards of 900 MW, while reducing the cost shift to non-DG customers, which they estimate to the tune of $38 million in 2013, or $31 for each non-DG customer.

In Hawaiian Electric's proposed tariff structure, referred to as "Gross Export Purchase program," all residential customer groups—current Net Energy Metering (NEM) customers, “DG 2.0” customers, and “Full Service” customers (non-DG)—incur a fixed monthly charge of $55 and pay retail rate for any energy consumed from the grid. The idea of the Gross Export Purchase Program is to account for some combination of interconnection and grid service charges. The first major proposal is to switch the NEM program to one where customers are compensated at wholesale rates rather than retail rates (similar to KIUC and many other utilities). This is to account for, as Hawaiian Electric puts it, “the value of DG to the grid.” Following the duck-shaped load curve, the bulk of electricity generation from DG occurs during the day, while peak consumption occurs in the late afternoon/early evening. Under the current rate structure, DG providers are providing “cheap” electricity while consuming “expensive” electricity. Current NEM customers will be grandfathered according to their original agreement (i.e. the utility pays retail rate in credits which expire at the end of the calendar year). Future NEM customers, called DG 2.0, will pay an additional monthly fixed charge of $16 and any excess electricity generated would be compensated at the lower rate of 16¢/kWh, reflecting that of wholesale rates.


Source: Hawaiian Electric Companies, 2014. Hawaiian Electric Power Supply Improvement Plan (PSIP).

The second proposal is to quicken interconnection for what is termed the “non-export option.” It allows customers to offset their electricity use so long as they do not send excess generation to the grid. The non-export option includes several variations. There are those that operate in parallel with the distribution system (grid-interactive) and with or without customer-side energy storage; and those that are independent from the grid (non-parallel operation) and with energy storage. A type of parallel non-export system without energy storage is an over-installed system under Hawaiian Electric’s Standard Interconnect Agreement—where there is a possibility for energy to “leak” back to the grid, though the customer receives no compensation. On the other hand, systems configured for non-parallel operation serve only an isolated load, thereby negating any possibility for reverse power flow into the distribution network. As filed in Docket 2014-0130, non-parallel systems are therefore eligible to bypass the full screening process under Rule 14H. Systems that have the potential to operate in parallel may also be granted expedited approval if reverse power protection measures, such as stand-alone inverters, is installed.

Will it Increase PV Installations?

The underlying question remains—will PV installations increase under Hawaiian Electric’s proposal? Certainly the change away from retail to wholesale rates for NEM customers, along with technical upgrades, increases utility revenue and its incentive to allow for more PV system connections. It also decreases potential customers incentive to install solar PV – though arguably the return on investment has been remarkably high and customers are still likely to install even if incentives decline slightly. Moreover, there is an element of increased fairness to non-DG customers through the revised NEM rates (assuming savings are passed through accordingly). So the answer is, it depends. On the continued decline of PV system costs, tax credits, the cost of battery technology and electricity rates. Whereas a decline in battery technology costs might lead to increased solar PV yet fewer connections to the grid, declining electricity rates would have the opposite effect. Within Hawaiian Electric’s proposal, they also project substantial cost savings primarily due to the introduction of LNG. This, however, is a more long-term endeavor than the granting of near-term solar PV permits.

- Sherilyn Wee and Makena Coffman


Understanding the Links Between Local Ecological Knowledge, Ecosystem Services, and Resilience

UHERO’s Project Environment has received funding from the National Science Foundation to participate in an interdisciplinary, international project that spans the natural and social sciences as well as the terrestrial and marine spheres. UHERO is partnering with scientists, resource managers, cultural practitioners and private landowners in Hawaii and Fiji. The project has two distinct parts; the first examines the relationship between local ecological knowledge and social, economic, and ecological outcomes across twenty rural villages in Fiji. The second part of the project explores the effects of different management and climate change scenarios on ecosystem services and indicators of resilience in three Pacific island watersheds.

For Part 1 of the project, we will focus on twenty rural coastal communities across four districts in Fiji. The team will collect household and village-level data within each of the four districts on ecological knowledge, customary skills and intergenerational knowledge. This will be matched to new and existing data collected from nearby forests and reefs. The goal is to develop an index of local ecological knowledge, as well as an index of social-ecological resilience, and examine relationships between these new indices and other ecological, social and economic outcomes. Of particular interest is the influence of local ecological knowledge on our indicators of resilience.



In Part 2 we will conduct three in-depth case studies at the watershed level, focused on quantifying ecological, cultural, and economic values of various land/ocean uses and covers, and their implications for resilience to climate change. The three watersheds were chosen where collaborators have long-term studies to leverage strong existing relationships with landowners, resource managers and users. The watersheds include Kaupulehu on the leeward coast of Hawaii Island, Haena on the north shore of Kauai, and Kubulau on southwestern Vanua Levu.

In each watershed we will collect new terrestrial data on vegetative composition, canopy cover, and indicators of habitat connectivity. Marine ecological surveys will include reef fish assemblages, benthic cover, species composition, biomass, and trophic structure. Ecosystem and cultural services for land and ocean uses will be calculated based on existing data, ecological characteristics, participatory mapping, and interviews.

To understand what combination of land-use practices best enhance social-ecological resilience under different climate change scenarios, we will evaluate the levels and resilience of ecosystem services under multiple future scenarios of climate change and management. These scenarios will represent a range of likely future climates crossed with a range of possible management decisions for each of the three watersheds. After developing an understanding of the ecological, cultural, and economic benefits of each of the management scenarios, we will then assess the costs of various management regimes under different climate change scenarios. The team can then identify a series of “optimum” scenarios – those that appear to maximize resilience indicators and emphasize the cultural, economic and ecological values identified to be of interest to the community members, land managers, and other stakeholders.

Our dual focus on Hawaii and Fiji provides a spectrum of cultural values and land and ocean uses, from functional agroforestry and traditional subsistence fishing in Fiji, to systematic habitat conservation and restoration in Hawaii. As a result, we can capture a wide spectrum of land management paradigms and their potential outcomes under different climate change scenarios, and our results can inform decision making elsewhere in Hawaii, in the Pacific, and throughout coastal areas more broadly.

-Kim Burnett and Cheryl Geslani


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