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The costs of adaptation to climate change for water infrastructure in OECD countries

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  • Hughes, Gordon
  • Chinowsky, Paul
  • Strzepek, Ken

Abstract

There is concern that climate change may greatly increase the costs of providing water infrastructure in rich countries, but the estimates available cannot be compared across countries. This paper develops and applies a top-down approach to estimate the costs of adapting to climate change on a consistent basis for different climate scenarios. The analysis separates (a) the costs of maintaining service standards for a baseline projection of demand, and (b) the costs of changes in water use and infrastructure as a consequence of changes in climate patterns. The engineering estimates focus on the direct capital and operating costs of adaptation without relying upon economic incentives to affect patterns of water use. On this assumption, the costs of adaptation are 1-2% of baseline costs for all OECD countries with the main element being the extra cost of water resources to meet higher level of municipal water demand. There are large differences in the cost of adaptation across countries and regions. Adopting an economic approach under which water levies are used to cap total water abstractions leads to a large reduction in the burden of adaptation and generates savings of $6-12 billion per year under different climate scenarios.

Suggested Citation

  • Hughes, Gordon & Chinowsky, Paul & Strzepek, Ken, 2010. "The costs of adaptation to climate change for water infrastructure in OECD countries," Utilities Policy, Elsevier, vol. 18(3), pages 142-153, September.
  • Handle: RePEc:eee:juipol:v:18:y:2010:i:3:p:142-153
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    References listed on IDEAS

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    Cited by:

    1. World Bank, 2016. "Moldova Climate Adaptation Investment Planning," World Bank Other Operational Studies 28332, The World Bank.
    2. John Reilly & Sergey Paltsev & Ken Strzepek & Noelle Selin & Yongxia Cai & Kyung-Min Nam & Erwan Monier & Stephanie Dutkiewicz & Jeffery Scott & Mort Webster & Andrei Sokolov, 2013. "Valuing climate impacts in integrated assessment models: the MIT IGSM," Climatic Change, Springer, vol. 117(3), pages 561-573, April.
    3. repec:wsi:wepxxx:v:04:y:2018:i:01:n:s2382624x1650034x is not listed on IDEAS
    4. Fuss, Sabine & Chen, Claudine & Jakob, Michael & Marxen, Annika & Rao, Narasimha D. & Edenhofer, Ottmar, 2016. "Could resource rents finance universal access to infrastructure? A first exploration of needs and rents," Environment and Development Economics, Cambridge University Press, vol. 21(06), pages 691-712, December.
    5. Jason F. L. Koopman & Onno Kuik & Richard S. J. Tol & Roy Brouwer, 2017. "The potential of water markets to allocate water between industry, agriculture, and public water utilities as an adaptation mechanism to climate change," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 22(2), pages 325-347, February.
    6. Noémie Neverre & Patrice Dumas, 2016. "Projecting Basin-Scale Distributed Irrigation and Domestic Water Demands and Values: A Generic Method for Large-Scale Modeling," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(04), pages 1-28, December.
    7. Olmstead, Sheila M., 2014. "Climate change adaptation and water resource management: A review of the literature," Energy Economics, Elsevier, vol. 46(C), pages 500-509.

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