1

Review of key economic findingsProfessor Farzad Taheripour

Tuesday, 1 December 2020

Workshop on Economic Implications of Climate Change and Water Scarcity in the Mashreq Region

Water in the balance

2

An overview of GTAP-BIO-W

Peña-Lévano L., Taheripour F., and Tyner W. (2019) “Climate change interactions with agriculture, forestry sequestration, and food security,” Environmental and Resource Economics, 74, pp 653–675.

3

Water allocation and water-related sectors

Water and land allocation modules operate at river basin by Agro-Ecological zones

Crops, livestock, and several industries use water in their production function

4

Research methodology: a schematic representation

Climate

change

Temperature

Precipitation

Socio-economic

factors

CO2 concentration

Crop models

Medium to long run

projections for

changes in crop

yields

Drivers of crop yields

Determinants of water scarcity

Supply of water

Demand for water in agriculture and non-

agricultural

Water

scarcity

GTAP-BIO-W

Economic models to

evaluate impacts of

changes in crop

yields and water

scarcity

5

Projected changes in crop yieldsClimate change is expected reduce yields

Changes in crop yields due 5% increase temperature in the Middle East

5

Country Rice WheatCoarse

grains

Oil

crops

Sugar

cropsFibers

Vegetable

s and

fruits

Other

crops

Iran -20.3 -56.8 -41.6 24.5 10.1 -20.5 3.2 6.1

Iraq 0.0 -71.6 -60.2 12.9 10.1 0.0 4.0 -1.7

Jordan 0.0 -53.3 -28.6 13.8 0.0 0.0 2.4 2.4

Lebanon 0.0 -43.6 -38.7 13.7 10.4 0.0 3.3 8.2

Syria 0.0 -44.0 -37.3 13.7 10.3 1.1 2.8 4.7

Turkey -30.9 -49.1 -37.8 13.9 10.2 -8.3 3.2 2.2

RME -2.6 -59.9 -20.9 13.7 10.7 1.7 5.0 3.6

Two examples for wheat

AEZ9 in Turkey

AEZ9 in Iran

6

Projected changes in water supply Water supply is projected to fall in the Middle East

Changes in rainfall: Historical observations

6

Future projections

Many key papers have addressed the issue of water scarcity in the Middle East.

A recent research developed at Purdue University using a hydrology model (Water Balance Model) projects declines in water supply in the Middle East ranging from 13% to 28% by 2050.

7

Idled capacityWater scarcity generates idled capacities in agricultural and non agricultural activities

7

8

Drained employmentWater scarcity reduces labor demand.

Non-agricultural activities Agricultural activities

LABOUR DEMAND

8

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

Iraq Syria Turkey Jordan Iran Lebanon

Unskilled Skilled

-12%

-10%

-8%

-6%

-4%

-2%

0%

Syria Iran Jordan Turkey Iraq Lebanon

Unskilled Skilled

9

Impact on individuals

Lowerincomes

Higherfood prices

High political and social costs beyond food security and poverty

9

10

Water-use efficiency: benefits and limits

-4.0billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Iraq

-20.3billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%Present day

No efficiency improvement +10% efficiency +20% efficiency

IranWater scarcity scenarios

-1.6billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Jordan

-0.3billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Lebanon

-1.7billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Syria

-13.8billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement +10% efficiency +20% efficiency

Turkey

11

Water-use efficiency: benefits and limits

-30.0-25.1

-20.3billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Iran Water scarcity scenarios

-51.0

-31.8

-13.8billion USD

-12%

-10%

-8%

-6%

-4%

-2%

0%

2%

Present dayNo efficiencyimprovement

+10%efficiency

+20%efficiency

Turkey Water scarcity scenarios

11

12

Water scarcity contributes to deforestation and land degradation

12

Rainfed cropland expansion to make-up for lost irrigated area leads to deforestation

13

Download the reporthttps://bit.ly/399p3vE