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An interregional Input-Output model with spatiotemporal hydrological variability. The case of Tuscany

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  • Gino Sturla
  • Benedetto Rocchi

Abstract

The work of Rocchi and Sturla (2021) presents an analysis of the pressure of the economic system on water resources in Tuscany at the regional level; in a following development Sturla and Rocchi (2022) incorporate temporal the hydrological variability to the regional model, with endogenous effects on agricultural and water for dilution demand. In this study, spatiotemporal variability is incorporated through i) a spatial disaggregation of the economic system based on an interregional input-output model (IRIO model) of Tuscan economy, ii) a spatial disaggregation of the hydrological components based on subregional data, and iii) a spatiotemporal model for the hydrological components based on a spatial stochastic model of precipitation. The spatial analysis scale corresponds to the Local Labor System (LLS), groups of contiguous municipalities classified based on economic criteria. Using the model developed, it is estimated the extended water exploitation index (EWEI), considering the extended demand (ED) and the feasible supply (FS) of water for each LLS; 100 hydrological years are simulated using a Montecarlo procedure. A novel endogenous scarcity threshold (ST) is proposed based on the results of the model and the intra-annual economic and hydrological characteristics of each LLS. With the EWEI and the ST, the hydro-economic equilibrium (HEE) for average hydrological conditions is characterised and the opportunity cost of the HEE is estimated. The latter corresponds to the minimum reduction of regional gross output compatible with the existence HEE in all LLS. Finally, the analysis is replicated considering a hydrology scenario under climate change.

Suggested Citation

  • Gino Sturla & Benedetto Rocchi, 2022. "An interregional Input-Output model with spatiotemporal hydrological variability. The case of Tuscany," Working Papers - Economics wp2022_26.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2022_26.rdf
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    References listed on IDEAS

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    1. Lenzen, Manfred & Moran, Daniel & Bhaduri, Anik & Kanemoto, Keiichiro & Bekchanov, Maksud & Geschke, Arne & Foran, Barney, 2013. "International trade of scarce water," Ecological Economics, Elsevier, vol. 94(C), pages 78-85.
    2. Jorge A. Garcia-Hernandez & Roy Brouwer, 2021. "A multiregional input–output optimization model to assess impacts of water supply disruptions under climate change on the Great Lakes economy," Economic Systems Research, Taylor & Francis Journals, vol. 33(4), pages 509-535, October.
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    More about this item

    Keywords

    interregional input-output; hydrological variability; local economies; water stress; hydro-economic equilibrium; climate change.;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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