2011
DOI: 10.1007/s11269-011-9811-4
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Assessing the Macroeconomic Impact of Water Supply Restrictions Through an Input–Output Analysis

Abstract: Water supply restrictions due to droughts generate significant costs to many economic agents. Although these costs are difficult to assess, this article presents a methodology to quantify, from a general equilibrium perspective, the macroeconomic impact of water supply restrictions through the estimation of aggregate production functions that include water consumption by sectors. Simulations with an Input-output model suggest a loss of 0.34% of GDP in the case of modest restrictions on the water supply and 2.8… Show more

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Cited by 25 publications
(20 citation statements)
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“…For a detailed analysis of supply chains of some commodities that are accounted in aggregated accounts in IOMs, hybrid IOMs that combine LCA with IOM have also been implemented (Treolar 1997;Lenzen 2002;Suh et al 2004;Suh and Huppes 2002). Using IOM-like models such as the Ghosh model, the economy-wide impacts of reduced water supplies have been traced through the affected production (and value-added) sectors (González 2011), albeit at an aggregated and national level that does not easily lend itself to the temporally variable nature of water resource dynamics.…”
Section: Economy-wide Hydro-economic Models: Ioms and Cge Modelsmentioning
confidence: 99%
“…For a detailed analysis of supply chains of some commodities that are accounted in aggregated accounts in IOMs, hybrid IOMs that combine LCA with IOM have also been implemented (Treolar 1997;Lenzen 2002;Suh et al 2004;Suh and Huppes 2002). Using IOM-like models such as the Ghosh model, the economy-wide impacts of reduced water supplies have been traced through the affected production (and value-added) sectors (González 2011), albeit at an aggregated and national level that does not easily lend itself to the temporally variable nature of water resource dynamics.…”
Section: Economy-wide Hydro-economic Models: Ioms and Cge Modelsmentioning
confidence: 99%
“…Unlike other Drought Management Plans that clearly specify the water restrictions to be applied for every sector under each drought threshold, the DRB Drought Management Plan offers a considerable degree of flexibility [36]. Therefore, this new regulation may have a different impact on regional GDP depending on the sectors affected by water restrictions [25]. Second, regarding water scarcity, the recently approved Duero River Basin Management Plan established a set of guidelines (potentially including economic instruments, command-and-control policies and technical alternatives) to restore environmental services that will likely demand a permanent restriction in water use in some productive activities [34].…”
Section: The Case Study Area: the Castile And León Region (Spain)mentioning
confidence: 99%
“…IO models have been traditionally used to assess direct (observed) and indirect water uses (induced) in different EU regions [22][23][24]. More recently, these models have been adapted to assess the economic impact of alternative water policies [25][26][27].…”
Section: Introductionmentioning
confidence: 99%
“…While the farm scale is a typical case for agriculture, attention to agricultural systems is also important, and the basin scale has become a key scale of analysis in order to account for inter-sector connections, whilst maintaining a clear relationship with a meaningful hydrological unit. However, over time, the interconnections among economic activities and the emergence of global phenomena such as climate change have led to an increasing number of modelling exercises using even regional, national or global scales (see e.g., [15][16][17]). Different scales may yield completely different pictures due to interconnections among sectors, but also highlight the urgency for compensation and displacement effects.…”
Section: Changing Context and Research Challengesmentioning
confidence: 99%