ECONOMIC IMPLICATIONS OF POLICY RESTRICTIONS ON WATER WITHDRAWALS FROM SURFACE AND UNDERGROUND SOURCES

Carlos A. L�pez-Morales and Faye Duchin ()

Economic Systems Research, 2015, vol. 27, issue 2, 154-171

Abstract: The appropriation of water for economic activities is limited by regional surface and underground endowments, and symptoms of environmentally unsustainable withdrawals are already visible in many regions of the world. In this paper we investigate the economic implications of water policy imposing source- and region-specific restrictions on water withdrawals taking the Mexican economy as a case study. We use an inter-regional input-output model of Mexico's hydro-economic regions to allocate production subject to the availability of water and other factors of production. Water sustainability requires a reduction of 7.5 km-super-3/yr of groundwater withdrawals, which is compensated by an increase of 3.4 km-super-3/yr of surface water, an expansion onto an additional 1.4 million hectares of rainfed land, and modifications in subnational patterns of food trade. This framework for evaluating scenarios describing sustainability-oriented water policies is readily applicable to other regions.

Date: 2015
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DOI: 10.1080/09535314.2014.980224

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