Narrow Results

Investing in Technology for Water Sustainability.

Water Policy Response to Water Scarcity and Future Climate Change Impacts.

Recirculation Aquaculture Systems (RAS): An Opportunity for the SE Asian Aquaculture Industry.

We simulate and analyze the direct and indirect economic impacts of climate change on water availability for irrigation on the economy of the Netherlands and the other EU countries which share the Rhine and Meuse river basin (France, Germany and Belgium), employing a computable general equilibrium (CGE) model. We make use of the GTAP-W model, distinguishing between rainfed and irrigated land and irrigation water as input factors in agricultural production. We assess the scope of market adaptation to climate change by comparing the CGE results with the direct agricultural damage costs estimated using hydrological and crop growth models. We find considerable scope for market adaptation in that total economic impacts on agriculture are much lower when accounting for substitution effects and cross-sectoral and cross-country interlinkages, while the impact on the nonagricultural sectors becomes larger when these substitution effects and interlinkages are accounted for.

Adaptation gaps arise when observed adaptation to climate change is slower than perceived adaptation potential. Two common explanations for adaptation gaps are (1) private parties failing to recognize that the climate is changing and (2) the cost of adaptation is higher than commonly believed. This paper shows how these two explanations are linked and that the likelihood and duration of adaptation gaps depend on whether climate change is characterized by stationary or non-stationary dynamics. Using an investment in water-saving irrigation in California’s Central Valley as an illustrative example, we find little evidence that failing to account for climate change would explain adaptation gaps. A more likely explanation for adaptation gaps is a failure to account for the adaptation option value that arises due to the possibility of maladaptation.

Exploitation of alternative water sources is expected to grow in the decades to come in water-stressed countries with fast population growth, especially in regions where a further decline of natural freshwater availability is expected due to climate change. Increasing utilization of non-freshwater usually leads to salinity build-up in fields and water sources as well as accumulation of various pollutants — both having a considerable impact on the suitability of non-freshwater for irrigation due to constraints associated with crop salinity tolerance and food safety regulations. We developed a linked Computable General Equilibrium (CGE) — farm-level model of a water economy with representation for multiple water types characterized by different qualities. We employ the model to assess the impact of water shortage on the Israeli economy, where steadily growing water scarcity leads to an increasing utilization of alternative water sources. We simulate water shortage scenarios based on the Long Term National Master Plan for The Water Economy developed by the Israeli Water Authority (IWA). The linked CGE — farm-level model provides a mechanism for estimating the Constant Elasticity of Substitution (CES) rates between different irrigation water types used in agriculture. This mechanism accounts for the effects of salinity on yields and takes into consideration food safety regulations for irrigating crops with treated wastewater. We demonstrate that, in contrast to previous studies, CES rates between different water types are not identical. The CES rates obtained in our study have relatively low values, which can be attributed to the constraints associated with crop salinity tolerance and food safety regulations. Our results reveal that water shortage can lead to a significant decline of Israel’s GDP, where a considerable part of the decline is attributed to the decrease in agricultural outputs. The magnitude of the impact depends on the underlying assumptions regarding future desalination capacity. To further study the effect of desalination, we run simulations under various desalination levels and examine its impact on the GDP. We also examine the extent to which the impact of water shortage is sensitive to CES rates between different irrigation water types.

An allocation-based rate (ABR) is a special type of increasing block rate (IBR) price structure that is receiving increased attention from urban water suppliers in places like California where population growth and climate change continue to increase water scarcity. Previous work by Baerenklau et al. [Baerenklau, KA, KA Schwabe and A Dinar (2014a). Allocation-based water pricing promotes conservation while keeping user costs low. Agricultural and Resource Economics Update, 17(6), 1–14; Baerenklau, KA, KA Schwabe and A Dinar (2014b). The residential water demand effect of increasing block rate water budgets. Land Economics, 90(4), 683–699.] investigates the conservation potential of ABR and finds that consumption under ABR was 10–15% below that of a comparable uniform rate structure for a southern California case study. This paper extends that work by using the discrete–continuous choice framework to estimate household-level welfare effects of ABR for the same dataset. We find that despite the observed decrease in consumption, average household welfare actually increased under ABR due to its non-linear structure. We also find that similar results would have been achievable with a simpler standard IBR structure. While either of these block rate structures is welfare-preferred to uniform price and quantity instruments, neither clearly dominates the other.

The paper introduces the concept of the risk-adjusted user cost (RAUC) and its application to the volumetric price charged to water consumers. It is a risk premium that would be incorporated into and be a component of a dynamic pricing framework. The benefit of the RAUC is that it allows decision-makers to inter-temporally maximize social welfare when the future water supply is uncertain. The RAUC imposes higher volumetric prices today to promote water conservation and, thus, mitigate the possibility of future water restrictions. An application of how the RAUC can be estimated is provided based on data from the Australian Capital Territory, Australia. Key policy implications in relation to the RAUC and dynamic water pricing are also presented.

More than one-quarter of the world’s population lives in water-scarce areas, while most countries share at least one transboundary river. If water scarcity is this prevalent, should we expect riparian countries to fight over the water allocation of shared rivers? To answer this question, I develop a modified one-shot three-stage river-sharing game where countries can resort to force to solve their water allocation problem. Using backward induction, I solve for the probability of the downstream country initiating conflict against the upstream country and the likelihood of the latter responding with force to the former’s hostile actions. I test the model empirically using a set of all upstream–downstream riparian dyads with available data from AQUASTAT and the Correlates of War Project for the years 1960–2010. The main contribution of this paper is that it demonstrates how upstream and downstream riparian countries differ in their decision to use force against the other country when experiencing water scarcity. I find that water scarcity increases the likelihood of the downstream country initiating the conflict, but it has no effect on the upstream country’s likelihood of responding with force. If history is a predictor of the future, then the results imply that as more riparian countries become water-scarce, militarized conflicts between upstream and downstream countries are likely to increase, especially if there is heterogeneity in water availability between the riparian dyad.

Water sustainability is central to modern political and academic debates. Despite increasing efforts to promote regional and global integrated water management, climate change, population, and economic growth, and increasing consumption of water-intensive goods project higher water deficiency. Robust economic analyses rely on information about water supply and consumption across different production sectors, type of procurement source (public or private water supply), and water prices. Nevertheless, developing current and future economic water assessments and indicators is impeded by the absence of data. Despite the lack of official national statistics on water withdrawal and consumption, a small number of international and global databases have been constructed and attempt to combine available national water information into databases. Water databases do not commonly define and/or distinguish terms such as water use, water consumption, water supply, or water abstraction, and the associated aspects of water scarcity and sustainability. They comprise variable data quality, provided by numerous sources, and estimated values. This paper evaluates the current state of knowledge of national statistics, international and global water databases. We describe the data collection methods, identify basic concepts and definitions of water terms, followed by the criteria of consistent water databases. We inform about data availability across regions, and present the data content and definitions of national, international, and global water databases. The results show inconsistencies of data content and definitions, suggesting no evidence of data harmonization among databases. Therefore, our study cautions researchers to be careful when manipulating and comparing the available water data, especially when deriving policy recommendations or economic conclusions. In the long run, the headway of water research and political assessments depend on political enforcements to refine the meaningfulness of water data and support water collection, reporting, and monitoring. Alternatively, in the short- and medium-run, water data challenges can be addressed by joint research efforts for water data harmonization.

Climate variability is reflected in water affluence that directly impacts the availability and level of water in reservoirs. Economic instruments, such as tariffs, are increasingly being used to promote the rational use of water. This study offers a floating rate model for charging raw water as a function of the reservoir level. The model was designed in the Jaguaribe–Metropolitan System, a place characterized by water-use conflicts during water scarcity. The model was developed as a function of the unit payment capacity (UPC) and drought states of the hydrographic regions. We applied the free software R and PSO optimization package to define the optimal UPC fraction and evaluated the model sensitivity using a synthetic series generated with the Markov chain method. Consequently, we observed that comfortable, alert, and critical situation levels predominated in the sensitivity analysis, and the average collections paid for administration, operation, and maintenance (AO&M) costs. In some cases, a collection surplus that can be managed through a financial fund to finance the system in periods of critical shortage is generated.

This study utilized the contingent valuation method to estimate the value of water-related ecosystem services (ES) in Vietnam, focusing on provisioning and regulating services for addressing water scarcity (WS) in rice farming. By incorporating gender and climate change perceptions, it expanded the existing literature on valuing river ecosystem services. The findings showed a significant number of households experiencing severe water scarcity in the past five years, with over 70% facing occasional or regular WS in the last 12 months. Rice farmers were willing to adopt coping measures and preventive practices to preserve water-related ES, recognizing their importance for sustaining rice cultivation. Farmers demonstrated willingness to contribute financially to restore and maintain water-related ES in rivers and canals. The median willingness to pay for restoration was VND188,300/ha, with estimated values of US$2,898,133 for a 10% affected area and US$23,185,068 for an 80% affected area over five years. Perception of WS severity and associated risk positively influenced households’ decisions to contribute financially. These findings have policy implications and provide insights for effective coping strategies against WS, enhancing water-resilient agriculture in the Lower Mekong Basin.

Water scarcity impedes economic development and can be expensive or infeasible to resolve in many developing countries with recurring water service outages. In such circumstances, water supply organizations may be able to improve ancillary water service attributes to alleviate the burden of service interruptions. We use a discrete choice experiment to estimate households’ willingness to pay (WTP) for improved water quality, coordinated scheduling of planned service interruptions, water use restrictions, and improved dissemination of information about upcoming service interruptions in Puerto Rico. The results indicate that households’ WTP varies considerably across attributes and is greatest ($ 28/month per household) for ensuring adequate water quality. Preferences for water service improvements vary across geographic locations and latent user groups.

The European Water Framework Directive (WFD) is one of the most analyzed environmental legislations in the scientific literature, influencing the water management in some non-European countries. The WFD has the strong ambition of achieving a good ecological status of water bodies across all river basins in Europe. However, the advances towards sustainable management are falling far behind the planned schedule. The emphasis of the Directive is focused on water quality rather than on water quantity. The advances during the last quarter of the century since its inception have been strong on urban and industrial point pollution, but not on agricultural non-point pollution that remains high and even increases in major basins. Water quantity aspects have been mostly left aside in the Directive, despite the fact that water scarcity is a serious problem in Southern European countries, and will become more critical with climate change in most basins across Europe. Some policy measures of the WFD need to be reformed, in particular measures for abating agricultural pollution, and new measures for addressing water scarcity. The narrow focus of the WFD on water pricing to solve at the same time issues of financing, water allocation and efficiency, environment, opportunity costs and pollution abatement, should be broadened. The challenge is giving more emphasis to command & control and collective action instruments, and designing combinations of instruments adapted to sectoral and spatial locations in basins. This overhaul of the water policy instruments by the European Commission will be needed to advance in the sustainable management of river basins in Europe.

Water withdrawals are expected to continue growing, further straining available freshwater resources for economies. This review focuses on two key relationships between water and economic growth for developed and developing countries. Rising freshwater withdrawals and stress are directly related to how our economies use water to develop and grow. There is also concern that increasing water scarcity will impact economic growth across countries and regions. Unless there is a marked improvement in the water intensity of countries, economic growth will be the most important driver of increasing water withdrawals and scarcity. Although analysis of the impact of freshwater stress on the growth of economies is inconclusive, there is mounting evidence of an impact at the river basin and sub-national level. Decoupling rising water use from growth will require major water management reforms. Two of them are discussed here: Ending excessive subsidization of irrigation and reallocating subsidies for water supply and sanitation to expand delivery in developing countries.

Water scarcity is a pressing global challenge which must be addressed promptly with sustainable solutions. This essay discusses fog harvesting as a promising supplemental water source in the coastal regions of South America. Fog harvesting proves to be a highly cost-effective and energy-efficient solution, providing access to water to communities in geographically challenging areas. Various factors affecting its efficiency are explored, while highlighting the need for research and development in the field to maximize its potential and enhance long-term water security.

Efficiency analyses of public services, such as water resource management, is in vogue owing to investments financed by taxpayers. However, in regulated sectors, i.e., without competition, data envelopment analysis (DEA) results for decision-making are questionable. Indeed, DEA is sensitive to the data, inputs, and outputs chosen by the researcher and can be highly influenced by outliers. There is no space for specialization: a decision-making unit (DMU) may be inefficient generally but efficient in one particular activity (output). Previous studies on DEA of water efficiency use second-stage analysis with exogenous factors, i.e., not controlled by management, making empirical applications unfeasible. In addition, models do not reflect changes in the specialization of DMUs through time caused by financial crises or lack of infrastructure. DEA visualization combines the standard DEA analysis with multivariate statistical methods. In this chapter, water supply and quality in 31 provinces of China are benchmarked for 2020. The results show nine efficient provinces for the traditional DEA model (all the variables). Other provinces become efficient when considering infrastructure for water supply versus water quality (few pollutants). Two provinces are efficient due to a surplus of natural water resources (overcapacity) in relation to their population, allowing for high-quality water provision, which may be transferred to regions with high water scarcity.

The chapter aims to analyze the current state of water resources in Southern Russia in the context of achieving sustainable development goals. Recent climatic changes lead to abnormal and irreversible transformations of territories. In particular, the South of Russia is characterized by excessive aridization and desertification. Methodologically, this chapter has an applied analytical nature, relying on comprehensive statistical sources. The authors of this chapter conclude that social motivation and fiscal instruments are not working. In this case, the attention of researchers and policy-makers should be paid to other mechanisms that allow determining the ways of rational, balanced environmental management.

The supply of renewable natural water available in a sustainable fashion in the Jordan River Basin (JRB), comprising Israel, Jordan, and the Palestinian Authority (PA), will soon drop below 100 cubic meters (m³) per person per year. Drawing on recent technological progress and policy innovations, a comprehensive policy to address the region’s water problems in the long run is offered. The policy has a dual goal: to satisfy the needs of a growing population (domestic, irrigation, and industry) and to preserve important environmental amenities, including restoration of the lower Jordan River (LJR) and stabilization of the Dead Sea. The gap between natural water supplies and the basic needs of the growing population will be closed by conservation and desalination; at the same time, all domestic water will be recycled and will be available for reuse in irrigation and environmental restoration. Over time, the supply of recycled water that should be allocated for environmental restoration (accounting for the compensation of irrigators) will suffice to partially restore the LJR and contribute to the stabilization of the Dead Sea. The analysis is relevant in a wide range of real-world situations, where satisfying the basic needs of a growing population and preserving environmental amenities become critical.