Hydroeconomic Modelling for Irrigated Agriculture Water Use in the Riviersonderend-Berg River Basin, South Africa

Ifedotun Aina, Djiby Racine Thiam and Ariel Dinar

No 334573, 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK from Agricultural Economics Society - AES

Abstract: This paper presents the development of an integrated hydroeconomic model for a large water system in which urban and agricultural sectors are the dominant water users, and climate change presents a major environmental challenge. The purpose of this model is to analyze the potential effects of different institutional scenarios and policy interventions on the environment and the regional economy, under varying water availability conditions. Our approach involves replicating base water use and environmental flow conditions in order to build the capacity to adapt to future climate-related water stresses. The modelling framework integrates hydrology, economics, climate stress, infrastructure constraints and institutional water supply decisions to address water stress variability. We analyze the effects of two water allocation policies, namely, water markets and proportional sharing. The results show the enhancement of economic benefits that can be achieved when high-valued water users are prioritized in the study area. We find that irrigated regions growing large quantities of higher valued crops such as fruit trees, maize and tobacco bear a smaller percentage of shortages than those with lower-valued crops as climate stress intensifies. This study informs strategies for water resource management in South Africa and many arid regions, given the imminent climate change impacts on water availability in coming decades.

Keywords: Resource/Energy Economics and Policy; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 1
Date: 2023-03
New Economics Papers: this item is included in nep-agr and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aesc23:334573

DOI: 10.22004/ag.econ.334573

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