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Presentation 21283

Presentation 21333

Innovations in water management and irrigated agriculture powered water-scarce Middle Eastern economies for millennia. However, as water becomes scarcer because of population growth and economic development, and even more erratic because of climate change, the region’s water security is coming under increasing threat. This report applies an economic model, the Global Trade Analysis Project (GTAP) computable general equilibrium model, to assess the economic impacts of water scarcity for six Middle Eastern countries and also to examine how water-use efficiency improvements and trade can mitigate these impacts. A 20 percent reduction in water supply could decrease GDP by up to 10 percent, compared to 2016 levels. Furthermore, increased water scarcity could reduce labor demand by up to 12 percent and lead to significant land-use changes, including loss of beneficial hydrological services. The report emphasizes how the growing dependence on shared water resources reinforces the need to manage water across boundaries. The message is clear: unless new and transformative policies for sustainable, efficient and cooperative water management are promoted, water scarcity will negatively impact the region’s economic prospects and undermine its human and natural capital.

Presentation19025

Morocco is expected to be faced with a major water shortfall prompted by either expansion in demand for water or reduction in precipitation induced by climate change. This paper examines the economywide impacts of these factors for Morocco. It uses a computable general equilibrium model augmented with submodules that trace consumption of water by uses and land allocation across sectors including crops, livestock, and forestry. Results show that water scarcity and changes in crop yields induced by climate change could reduce the GDP of Morocco up to 6.7 billion US dollars per year at 2016 constant prices and eliminate many job opportunities, in particular in the rural areas of this country. Only a portion of these negative impacts can be removed with improvements in water use efficiency. The factors mentioned above will reduce productivity of Morocco’s cropland and have the potential to reduce irrigated areas. Due to these changes, production of crops and food products are expected to fall, with increases in crop prices by up to 14.3 percent, assuming other factors being equal. Investment in water use efficiency practices that save water, in particular in agricultural activities, and shifting toward more valuable and less water intensive crops can help to partially mitigate these adverse impacts.

Presentation18279

Presentation ID 16238

Presentation ID 16117

Presentation ID 15701

Economics is about the management of scare resources. In agricultural production, water stress and excess heat are the main constraints. The three essays of this dissertation try to improve our understandings of how climate and water resources interact with agricultural markets, and how global changes in agricultural markets may affect water resources. I construct empirical and simulation models to explain the interplay between agriculture and water. These models integrate economic theories with environmental sciences to analyze the hydroclimatic and economic information at different geospatial scales in a changing climate. In the first essay, I illustrate how irrigation, as a potential adaptation channel, can reduce the volatility of crop yields and year-on-year variations caused by the projected heat stress. This work includes estimation of yield response to climate variation for irrigated and rainfed crops; and global projections of change in the mean and the variation of crop yields. I use my estimated response function to project future yield variations using NASA NEX-GDDP climate data. I show that the impact of heat stress on rainfed corn is around twice as big as irrigated practices. In the second essay, I establish a framework for estimating the value of soil moisture for rainfed production. This framework is an extension of Schlenker and Roberts (2009) model enabled by the detailed soil moisture information available from the Water Balance Model (WBM). An important contribution is the introduction of a cumulative yield production function considering the daily interaction of heat and soil moisture. I use this framework to investigate the impacts of soil moisture on corn yields in the United States. However, this framework can be used for the valuation of other ecosystem services at daily basis. In the third essay, I have constructed a model that explains how the global market economy interacts with local land and water resources. This helps us to broaden the scope of global to local analysis of systems sustainability. I have employed SIMPLE-G-W (a Simplified International Model of agricultural Prices, Land use, and the Environment- Gridded Water version) to explain the reallocation across regions. The model is based on a cost minimization behavior for irrigation technology choice for around 75,000 grid cells in the United States constrained by water rights, water availability, and quasi-irreversibility of groundwater supply. This model is used to examine the vulnerability of US land and water resources from global changes.

We quantify the local stresses related to land, water and nitrate leaching (spatially resolved at ~10km x 10km cells) across the continental U.S. arising from expansion and intensification of agriculture between the present and 2050. The stresses are decomposed into those due to population and income growth, climate change, biofuel demands and productivity improvements – both in the U.S. and abroad. We also highlight how these local stresses depend on local climate, soils, nitrogen applications and irrigation practices and identify the tradeoffs associated with achieving individual sustainability objectives. For example, restricting irrigation expansion puts added pressure on non-irrigated cropland expansion and intensification of production in the remaining cropped areas. The tradeoffs, and in some cases synergies, between achieving environmental, food security and farm income objectives are explored.

This paper measures the importance of different drivers of change in irrigation water use regionally and globally. We followed Heckscher–Ohlin theory, Ricardian specific-factor model, and Melitz-type theories of trade to introduce a method for decomposing irrigated water use. We apply the decomposition method on the results of Liu et al. (2014) on the impacts of future irrigation shortfalls. We find that rain fed substitution (specific-factor impact) contributes to 62% of change in water use; substitution to non-crops (Heckscher–Ohlin impact) accounts for 16% of the change; and moving to farms with higher water productivity (Melitz impact) contributes to 7% of it, globally. The importance of drivers varies by region but usually these three drivers are the most important factors in adaptation to water shocks.