Modeling water strongscarcitystrong and droughts to analyze water policies.pdf

Working Document 14/01 Modeling water scarcity and droughts to analyze water policies in the Jucar Basin (Spain) Mohamed Taher Kahil, Ariel Dinar and Jose Albiac Department of Agricultural Economics Agrifood Research and Technology Center (CITA- Government of Aragon) This Working Document draws from the first chapter of the Ph.D. dissertation by Mohamed Taher Kahil “Water management policies under scarcity and climate change: Analysis of economic instruments, institutions and collective action”, Department of Economic Analysis of the University of Zaragoza, Spain. The research has been supported by projects BIL13MA072 from MAPFRE and project INIA RTA2010-00109-C04 from the Spanish Ministry of Economy and Competitiveness. The ideas and opinions in this document are responsibility of the authors and not those of the institutions supporting the research. To obtain reprints of the Working Document contact: Jose Albiac Unidad Economia Agraria CITA-DGA Avenida de Montañana 930 50.059 Zaragoza Spain email: maella@unizar.es Phone: +34 976716351 Fax: +34 976716335     Summary Growing water extractions combined with emerging demands for environment protection increase competition for scarce water resources worldwide, especially in arid and semiarid regions. In those regions, climate change is projected to exacerbate water scarcity and increase the recurrence and intensity of droughts. These circumstances call for methodologies that can support the design of sustainable water management. This paper presents a hydro-economic model that links a reduced form hydrological component, with economic and environmental components. The model is applied to an arid and s