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Economic evaluation of the Diamer-Basha dam: Analysis with an integrated economic/water simulation model of Pakistan:

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  • Robinson, Sherman
  • Gueneau, Arthur

Abstract

This paper describes the potential impact on the economy of Pakistan of building the Diamer-Basha dam. An integrated system of economic and water simulation models is applied to Pakistan to analyze the economywide impacts of changes in water resources in the Indus river basin, focusing on agricultural and hydropower benefits provided by the Diamer-Basha dam under different climate scenarios. The model framework links separate economic and water models, drawing on the strengths of both approaches without having to compromise by specifying either a simplified treatment of water in an economic model or simplified economics in a water model. The model system is used to simulate the impact of economic growth and changes in water resources over the long run, focusing on agriculture and hydropower. The results of scenario analysis indicate that the Diamer-Basha dam would improve the resilience of Pakistan to adapt to climate shocks, providing increased hydropower capacity and enhanced ability to manage the water system to offset climate-induced variation in river flows.

Suggested Citation

  • Robinson, Sherman & Gueneau, Arthur, 2014. "Economic evaluation of the Diamer-Basha dam: Analysis with an integrated economic/water simulation model of Pakistan:," PSSP working papers 14, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:psspwp:14
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    References listed on IDEAS

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    1. Winston Yu & Yi-Chen Yang & Andre Savitsky & Donald Alford & Casey Brown & James Wescoat & Dario Debowicz & Sherman Robinson, 2013. "Indus Basin of Pakistan : Impacts of Climate Risks on Water and Agriculture," World Bank Publications - Books, The World Bank Group, number 13834.
    2. Dorosh, Paul & Niazi, Muhammad Khan, 2006. "Social Accounting Matrix for Pakistan, 2001-02: Methodology and Results," MPRA Paper 2242, University Library of Munich, Germany.
    3. Jones, Peter G. & Thornton, Philip K., 2013. "Generating downscaled weather data from a suite of climate models for agricultural modelling applications," Agricultural Systems, Elsevier, vol. 114(C), pages 1-5.
    4. Gerald C. Nelson & Dominique Mensbrugghe & Helal Ahammad & Elodie Blanc & Katherine Calvin & Tomoko Hasegawa & Petr Havlik & Edwina Heyhoe & Page Kyle & Hermann Lotze-Campen & Martin Lampe & Daniel Ma, 2014. "Agriculture and climate change in global scenarios: why don't the models agree," Agricultural Economics, International Association of Agricultural Economists, vol. 45(1), pages 85-101, January.
    5. Raes, Dirk & Geerts, Sam & Kipkorir, Emmanuel & Wellens, Joost & Sahli, Ali, 2006. "Simulation of yield decline as a result of water stress with a robust soil water balance model," Agricultural Water Management, Elsevier, vol. 81(3), pages 335-357, March.
    6. Debowicz, Dario & Dorosh, Paul A. & Robinson, Sherman & Haider, Syed Hamza, 2012. "A 2007-08 social accounting matrix for Pakistan:," PSSP working papers 1, International Food Policy Research Institute (IFPRI).
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    Keywords

    Rivers; Watersheds; Irrigation; Climate change; Dams; Computable General Equilibrium (CGE) model; Computable General Equilibrium water model;
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