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The Impact of Water Scarcity on Food, Deforestation and Bioenergy

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  • Winchester, Niven
  • Ledvina, Kirby
  • Strzepek, Kenneth
  • Reilly, John

Abstract

We evaluate the impact of water scarcity on food prices, deforestation and bioenergy production under a global carbon policy. The analysis develops a representation of irrigated land in the MIT Economic Project and Policy Analysis (EPPA) model, a global economy-wide model of energy and food production, land-use change and greenhouse gas emissions. The representation relies on the specification of irrigable land supply curves, which are built on detailed spatial estimates of water availability, and the costs of improving irrigation efficiency and increasing water storage. Simulating the model under a global carbon price, as there are endogenous improvements in irrigation infrastructure, we find that water availability has a small impact on food, deforestation and bioenergy outcomes. We also find that, relative to when irrigated land is not represented, heterogeneity in irrigation responses result in livestock production relocating from more land-intensive regions to less land-intensive regions, which leads to less deforestation.

Suggested Citation

  • Winchester, Niven & Ledvina, Kirby & Strzepek, Kenneth & Reilly, John, 2016. "The Impact of Water Scarcity on Food, Deforestation and Bioenergy," Conference papers 332736, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332736
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    References listed on IDEAS

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    1. 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.
    2. Dinar, Ariel, 2014. "Water and Economy-Wide Policy Interventions," Foundations and Trends(R) in Microeconomics, now publishers, vol. 10(2), pages 85-165, July.
    3. 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.
    4. Dudu, Hasan & Chumi, Sinqobile, 2008. "Economics of irrigation water management : a literature survey with focus on partial and general equilibrium models," Policy Research Working Paper Series 4556, The World Bank.
    5. 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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