How Will Climate Change Affect Water Demand? Evidence from Hawaii Microclimates

Nathan DeMaagd and Michael Roberts

No 202020, Working Papers from University of Hawaii at Manoa, Department of Economics

Abstract: The effect that climate change will have on water resource sustainability is gaining international interest, particularly in regions where stocks are strained due to changing climate and increasing populations. Past studies focus mainly on how water availability will be affected by climate change, with little attention paid to how consumer behavior is likely to react. How a changing climate affects water demand could be equally or more important to management solutions as its influence on water supply. In this paper, we analyze the relationship between residential water use and climate on the Hawaiian island of Oahu, and apply downscaled climate projections to estimate end-of-century water use. The island is serviced by only one water utility yet has a wide range of consumers and microclimates, which make it an ideal location for studying these relationships. We find that climate is strongly associated with residential water use in a manner that is likely causal. If the association is causal, it implies that demand will increase by 20-37 island-wide by the end of the century, holding all else the same, depending on the climate model projection. Strategies for offsetting the projected increase in demand are also considered, along with the study's place in literature examining watershed management and consumer welfare.

Keywords: water demand; climate change (search for similar items in EconPapers)
JEL-codes: Q25 Q54 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-agr and nep-env
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