How economically and environmentally viable are multiple dams? A hydro-economic analysis using a landscape-based hydrological model at the basin scale

Abstract. The construction of dams threats the health of watershed ecosystems. To address the health challenge requires a clear understanding of the hydrologic effects of multiple dams with concurrent disturbances at the basin scale and their impact on watershed ecosystems. The purpose of the study is to illustrate how multiple dams in a basin can impact hydrological flow regimes and subsequently aquatic ecosystems that depend on river flows. This study develops a hydro-economic approach to assessing the effects of multiple dams on river ecosystem services under varying scenarios of spatially located reservoirs in the Upper Cauvery River basin, a heavily altered river basin in India. The approach integrates a landscape-based hydrological model with an embedded reservoir operations model to support hydro-economic analysis at the basin scale. The hydrological impacts of different combinations of reservoirs are quantified using Indicators of Hydrologic Alteration (IHA). Further, the production of two major ecosystem services, fish species richness and agricultural production, that depend on flow regimes is estimated, with a production possibility frontier for the two services derived. Results show that smaller reservoirs on lower-order streams that maximize the economic value of water stored are better for the basin economy and the environment than bigger reservoirs. Growing high-value crops in a command area can maximize the value of stored water and, with lower storage, generate similar economic value while reducing hydrological alterations. The proposed approach can help water and river basin managers to understand the provision of ecosystem services in hydrologically altered basins, optimize dam operations, or even prioritize dam removal with the balanced provision of ecosystem services.