The global value of water in agriculture

D’Odorico, Paolo, Davide Danilo Chiarelli, Lorenzo Rosa, Alfredo Bini, David Zilberman and Maria Cristina Rulli

Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: Major environmental functions and human needs critically depend on water. In regions of the world affected by water scarcity economic activities can be constrained by water availability, leading to competition both among sectors and between human uses and environmental needs. While the commodification of water remains a contentious political issue, the valuation of this natural resource is sometime viewed as a strategy to avoid water waste. Likewise, water markets have been invoked as a mechanism to allocate water to economically most efficient uses. The value of water, however, remains difficult to estimate because water markets and market prices exist only in few regions of the world. Despite numerous attempts at estimating the value of water in the absence of markets (i.e., the "shadow price"), a global spatially explicit assessment of the value of water in agriculture is still missing. Here we propose a data-parsimonious biophysical framework to determine the value generated by water in irrigated agriculture and highlight its global spatiotemporal patterns. We find that in much of the world the actual crop distribution does not maximize agricultural water value.

Keywords: Economics; Applied Economics; Clean Water and Sanitation; Zero Hunger; Agricultural Irrigation; Conservation of Natural Resources; Crops; Agricultural; Water; Water Supply; water value; water productivity; irrigation (search for similar items in EconPapers)
Date: 2020-09-08
New Economics Papers: this item is included in nep-agr, nep-env and nep-law
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Citations: View citations in EconPapers (17)

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Journal Article: The global value of water in agriculture (2020)
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