GTAP-EW7 – A model to assess the impacts of climate change on world water availability and usage throughout the agricultural sectors of the world economies

Hiroshi Hamasaki and Truong Truong

No 332965, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We use the latest version 7 GTAP model to develop an extension to look at world water usage in agricultural economic activities; the extended model is referred to as GTAP-EW7. With the likelihood of world climate change, water availability for agricultural economic activities is likely to be affected through the so-called ‘precipitate rate’ which affects rainfall. We use the WRI (World Resources Institute) Aqueduct Water Stress Projections, RCP8.5 and SSP3, to estimate the likely impacts of climate change on precipitate rate throughout the world, by each country-region, and also by each agricultural economic zone (AEZ). The GTAP-EW7 model is then used to predict the re-allocation of agricultural economic activities resulting from the changes in precipitate rate, and hence the economic impacts of this re-allocation. As one of the goals of sustainable economic development (Sustainable Development Goal 6.4) is to “substantially increase water-use efficiency across all sectors and to ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity” by the year 2030, it is expected that this will stimulate competition throughout the world economies to secure water for their economic activities. How this will affect the achievement of the SDG 6.4 and the overall welfare of the peoples around the world is a critical issue and we use the GTAP-EW7 to study this issue. In the research we take two climate change scenarios, RCP4.5 and RCP8.5. Model simulated results indicate that the impacts of water availability and usage on the agricultural sectors of the world economies can be significant depending on the different structures of the economies as well as on the different patterns and intensities of water usage throughout these economies.

Keywords: Environmental Economics and Policy; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Date: 2018
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