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Abstract: The objective of this paper is to assess the economic impacts of reducing greenhouse gas emissions by decreasing industrial output in Canada to a level that will meet the target set out in the Kyoto Protocol. The study uses an ecological–economic Input–Output model combining economic components valued in monetary terms with ecologic components – GHG emissions – expressed in physical terms. Economic and greenhouse gas emissions data for Canada are computed in the same sectoral disaggregation. Three policy scenarios are considered: the first one uses the direct emission coefficients to allocate the reduction in industrial output, while the other two use the direct plus indirect emission coefficients. In the first two scenarios, the reduction in industrial sector output is allocated uniformly across sectors while it is allocated to the 12 largest emitting industries in the last one. The estimated impacts indicate that the results vary with the different allocation methods. The third policy scenario, allocation to the 12 largest emitting sectors, is the most cost effective of the three as the impacts of the Kyoto Protocol reduces Gross Domestic Product by 3.1% compared to 24% and 8.1% in the first two scenarios. Computed economic costs should be considered as upper-bounds because the model assumes immediate adjustment to the Kyoto Protocol and because flexibility mechanisms are not incorporated. The resulting upper-bound impact of the third scenario may seem to contradict those who claim that the Kyoto Protocol would place an unbearable burden on the Canadian economy. [Copyright &y& Elsevier]

Finding sustainable pathways to efficiently allocate limited available water resources among increasingly competing water uses has become crucial due to climate-change-induced water shortages and increasing water demand. This has led to an urgent need for the inclusion of economic principles, models, and methods in water resources management. Although several studies have developed macro-economic models to evaluate the economic impacts of alternative water allocation strategies, many if not most ignore the hydrological boundaries of transboundary river basins. Furthermore, of those using input-output (IO) models, only a handful have applied supply-side IO models. In this paper, we present one of the first attempts to develop an inter-regional, supply-side IO modelling framework for a multi-jurisdictional, transboundary river basin to assess the direct and indirect economic impacts of water supply restrictions due to climate and policy change. Applying this framework to the Saskatchewan River Basin in Canada encompassing three provinces, we investigate the economic impacts of two different water supply restriction scenarios on the entire river basin and its sub-basins individually. We find that in the face of climate-change-induced water shortage, economic losses can be reduced by almost 50% by adopting appropriate management practices, including prioritization of water allocation, using alternative water sources, and water re-use technologies. • Sectoral water use is incorporated into a supply-side input-output model. • The model is spatially disaggregated into 6 sub-basins across 3 Canadian provinces. • The model evaluates the economic impacts of alternative water allocation policies. • The model results assist policymakers prepare efficient water management plans. • Adopting proper policies, potential economic drought losses can be reduced by 50%. [ABSTRACT FROM AUTHOR]