Global Economic and Food Security Impacts of Demand-Driven Water Scarcity. Victor Nechifor

Transcription

1 Global Economic and Food Security Impacts of Demand-Driven Water Scarcity Victor Nechifor IAERE Conference Sixth Annual Conference Turin, 15 February 2018

2 Research area Water scarcity one of the looming global threats to economic prosperity WEF, OECD, World Bank Renewable freshwater resources unequally distributed across regions About 10% of renewable resources used in economic activities irrigation 70% of abstractions, power plant cooling 15% (IEA WEO 2012) Water demand: How will pressure of the resource base evolve up to 2050? What will be the economy-wide impacts of water scarcity GDP, welfare, sectoral output and food security? TITLE STYLE SUB STYLE 2

3 Analysis Withdrawals baseline construction for main user groups Modelling sectoral impacts of water scarcity using a CGE framework (RESCU-Water) 3

4 Global withdrawals projections 4

5 Water scarcity analysis - RESCU-Water Global economic model (CGE) 20 world regions, 31 productive sectors Dynamic-recursive simulations based on SSP storylines GTAP9-Power database with 11 technologies aggregated into thermal and non-thermal Water as an explicit economy-wide factor of production Advanced mechanisms of adaptation to water impairments Crops: irrigated rainfed growing methods Power production: thermal non-thermal technologies Other sectors: Input substitution of supplied water International trade with water-abundant regions (Armington specification) 5

6 Water scarcity scenarios Regional water use constraints based on sustainability thresholds India, South Asia, Middle East, Northern Africa Four water management options Full allocation (FA) perfect mobility across the economy Limited mobility (LM) 5% of resources re-allocable Market fragmentation (MF) separation between agri and non-agri users Agriculture last (AL) non-agri users unconstrained 6

7 Withdrawals baseline in water scarce regions 7

8 Macroeconomic impacts in 2050 water-scare regions Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 8

9 Macroeconomic impacts in globally Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 9

10 India change in output 2050 Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 10

11 India crop production changes 2050 Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 11

12 India - withdrawal changes 2050 (km 3 ) Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 12

13 Changes in virtual water trade in km 3 FA crops virtual water trade (change) Legend: LM Limited Mobility, AL Agriculture Last, FA Full Allocation, MF Market Fragmentation 13

14 Conclusions Baseline subject to many uncertainties e.g. base year withdrawals data, spatial expansion of energy systems Due to adaptation, GDP and EV impacts are lower than in other studies e.g. World Bank Macroeconomic outcomes are also affected by the allocation of non-water factors Significant trade-offs between crop production and other sectors Food security affected across all allocation methods drop in output and increase in prices of staple crops (India, South Asia and Middle East) International trade plays an important role only in regions with a significant baseline import dependency of water-intensive crops (e.g. Middle East) Withdrawal reduction occurs mainly in irrigation importance of water use efficiency for resilience to future water deficits Thermal power production minor role in withdrawals reduction but highly exposed to water scarcity 14

15 Thank you. 15

16 Thermal cooling - linking TIAM-UCL Thermal power by fuel and by cooling technology data WaterGAP/EXIOBASE freshwaterwithdrawals by fuel and cooling technology Water intensities (m 3 /MWh) from Florkeet al. (2013) Production projection by fuel TIAM-UCL projections by fuel type for SSP2 WaterGAP power production by country mapping to RESCU regions Cooling mix projection Power plant depreciation rate Tower cooling adoption rate new capacity more efficient Withdrawals projections by fuel and by technology RESCU-Water regional aggregation 16