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The impact of water scarcity on food, bioenergy and deforestation

Author

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  • Winchester, Niven
  • Ledvina, Kirby
  • Strzepek, Kenneth
  • Reilly, John M.
Abstract
We evaluate the impact of explicitly representing irrigated land and water scarcity in an economy-wide model with and without a global carbon policy. The analysis develops supply functions of irrigable land from a water resource model for 282 river basins and applies them within a global economy-wide model. The analysis reveals two key findings. First, explicitly representing irrigated land has a small impact on global food, bioenergy and deforestation outcomes. This is because this modification allows irrigated and rainfed land to expand in different proportions, which counters the effect of rising marginal costs for the expansion of irrigated land. Second, changes in water availability have small impacts on global food prices, bioenergy production, land use change and the overall economy, even with large-scale (c. 150 exajoules) bioenergy production, due in part to endogenous irrigation and storage responses. However, representing water scarcity and changes in water availability can be important regionally, with relatively arid areas and/or areas with rapidly growing populations fully exhausting our estimated maximum irrigation capacity that allows for improved irrigation efficiency, lining of canals to limit water loss, and expanding storage to fully capture average annual water flows.

Suggested Citation

  • Winchester, Niven & Ledvina, Kirby & Strzepek, Kenneth & Reilly, John M., 2018. "The impact of water scarcity on food, bioenergy and deforestation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(3), July.
    • Handle: RePEc:ags:aareaj:313591
    DOI: 10.22004/ag.econ.313591
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    References listed on IDEAS

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    1. Angel Aguiar & Badri Narayanan & Robert McDougall, 2016. "An Overview of the GTAP 9 Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 181-208, June.
    2. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
    3. Kirby Ledvina & Niven Winchester & Kenneth Strzepek & John M. Reilly, 2018. "New Data for Representing Irrigated Agriculture in Economy-Wide Models," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 3(1), pages 122-155, June.
    4. Frank van Tongeren & Robert Koopman & Stephen Karingi & John Reilly & Joseph Francois, 2021. "Back to the Future: A 25-Year Retrospective on GTAP and the Shaping of a New Agenda," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 3, pages 41-93, World Scientific Publishing Co. Pte. Ltd..
    5. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
    6. Winchester, Niven & Reilly, John M., 2015. "The feasibility, costs, and environmental implications of large-scale biomass energy," Energy Economics, Elsevier, vol. 51(C), pages 188-203.
    7. Dinar, Ariel, 2014. "Water and Economy-Wide Policy Interventions," Foundations and Trends(R) in Microeconomics, now publishers, vol. 10(2), pages 85-165, July.
    8. Angelo Gurgel & Tim Cronin & John Reilly & Sergey Paltsev & David Kicklighter & Jerry Melillo, 2011. "Food, Fuel, Forests, and the Pricing of Ecosystem Services," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 342-348.
    9. Iman Haqiqi & Farzad Taheripour & Jing Liu & Dominique van der Mensbrugghe, 2016. "Introducing Irrigation Water into GTAP Data Base Version 9," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(2), pages 116-155, December.
    10. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
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    Cited by:

    1. Taran Faehn & Gabriel Bachner & Robert Beach & Jean Chateau & Shinichiro Fujimori & Madanmohan Ghosh & Meriem Hamdi-Cherif & Elisa Lanzi & Sergey Paltsev & Toon Vandyck & Bruno Cunha & Rafael Garaffa , 2020. "Capturing Key Energy and Emission Trends in CGE models: Assessment of Status and Remaining Challenges," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 5(1), pages 196-272, June.

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