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GTAP Resource #4724

"Water Scarcity in South Asia: A Dynamic Computable General Equilibrium Analysis"
by Narayanan, Badri, Farzad Taheripour, Thomas Hertel, Sebnem Sahin and Jorge Escurra

The economy of South Asia faces serious challenges in water availability, expected to aggravate over the coming decades. There is a need for comprehensive analyses to understand these challenges and help regional decision makers develop policies to manage them. In this paper, we assess the long-run economy-wide impact of potential water scarcity in South Asia within a global context. We also explore potential policies to mitigate adverse impacts of such scarcity.

Literature review
Most these studies on water-food nexus miss the trade dimension, which, as pointed out by Liu et al. (2014) may moderate the impacts of localized water scarcity. However, such studies are comparative static. There are studies focusing on South Asia, using disaggregated time-series datasets in dynamic econometric frameworks; Siegfried et al. (2010) quantifies the impact of climate variability and unsustainable irrigation on regional agricultural production. Duflo and Pande (2007) focus on the uneven distributional effects of irrigation projects, particularly dams in India. None of these studies, however, provide a macro-economic perspective, as they are focused on specific regions or sectors.

Model description and methodology
We develop a recursive-dynamic CGE model, which is an extended version of the GDyn-E model (Golub, 2013;). The Gdyn-E model treats time as a variable and incorporates features of capital accumulation, stylized representation of financial assets and associated income flows, and investment theory (Ianchovichina and Walmsley, 2012). The extensions introduced for this work serve to bring water and bio-fuels into explicit consideration. The modified model was built based on a modified version of the GTAP data base version 8 (Narayanan et. al, 2012), which represents the world economy in 2007. Following Taheripour et al. (2013) several modifications are made in the GTAP standard data base version 8. Water conservation in the model is achieved by...

Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Created: Narayanan, B. (4/14/2015)
Updated: Narayanan, B. (4/14/2015)
Visits: 2,237
- Dynamic modeling
- Water availability
- Economic growth
- Food prices and food security
- Asia (South-Central)

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