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Simulating the Macroeconomic Impact of Future Water Scarcity an Assessment of Alternative Scenarios

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  • Roson, Roberto
  • Damania, Richard

Abstract

In this paper we consider some of the economic implications of climate change scenarios as described in the Shared Socioeconomic Pathways (SSPs). By comparing potential water demand with estimates of (sustainable) water availability in different regions, we identify regions that are likely to be constrained in their future economic growth potential by the scarcity of water resources. We assess the macroeconomic impact of water scarcity under alternative allocation rules finding that, by assigning more water to sectors in which it has a higher value, shifting production to less water intensive sectors, and importing more water intensive goods, constrained regions can effectively neutralize these water related climate risks and adapt to a changing water environment. However, this adaptation effort is likely to imply some radical changes in water management policies.

Suggested Citation

  • Roson, Roberto & Damania, Richard, 2016. "Simulating the Macroeconomic Impact of Future Water Scarcity an Assessment of Alternative Scenarios," Conference papers 332687, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
  • Handle: RePEc:ags:pugtwp:332687
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    Cited by:

    1. Hamasaki, Hiroshi & Truong, Truong, 2018. "GTAP-EW7 – A model to assess the impacts of climate change on world water availability and usage throughout the agricultural sectors of the world economies," Conference papers 332965, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Roberto Roson, 2017. "Beyond Water Stress: Structural Adjustment and Macroeconomic Consequences of the Emerging Water Scarcity," Working Papers 2017:07, Department of Economics, University of Venice "Ca' Foscari".
    3. Borgomeo, Edoardo & Vadheim, Bryan & Woldeyes, Firew B. & Alamirew, Tena & Tamru, Seneshaw & Charles, Katrina J. & Kebede, Seifu & Walker, Oliver, 2018. "The Distributional and Multi-Sectoral Impacts of Rainfall Shocks: Evidence From Computable General Equilibrium Modelling for the Awash Basin, Ethiopia," Ecological Economics, Elsevier, vol. 146(C), pages 621-632.
    4. Roberto Roson & Dominique van der Mensbrugghe, 2017. "Assessing Long Run Structural Change in Multi-Sector General Equilibrium Models," EcoMod2017 10257, EcoMod.

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    More about this item

    Keywords

    Research Methods/ Statistical Methods; Resource /Energy Economics and Policy;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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