How Will Climate Change Affect Residential Water Demand? Evidence from Hawai‘i Microclimates

The effect that climate change will have on water resource sustainability is gaining international interest, particularly in regions where stocks are strained due to changing climate and increasing populations. Past studies focus mainly on how water availability will be affected by climate change, with little attention paid to how consumer behavior is likely to react. How a changing climate affects water demand could be equally or more important to management solutions as its influence on water supply. In this paper, we analyze the relationship between residential water use and climate on the Hawaiian island of O‘ahu, and apply a variety of climate projections to estimate end-of-century water use. The island is serviced by only one water utility yet has a wide range of consumers and microclimates, which makes it an ideal location for studying these relationships. We find that climate is strongly associated with residential water use in a manner that is likely causal. If the association is causal, our mean estimates imply that residential demand may increase up to 36% island-wide by the end of the century, holding all else the same, depending on the climate model projection. Mean estimates, however, mask a large degree of uncertainty largely due to the wide range of projected climate outcomes. Strategies for offsetting the projected increase in demand are also considered, along with the study’s place in broader literature examining watershed management and consumer welfare.