Estimating Water Footprint and Water Economic Values in the Southeastern U.S.

Population growth and climate change have brought water disputes to the southeastern United States. To achieve sustainable water use of the region’s water resources and to alleviate future water stress, it is important to determine 1) current water quantity used to support regional economic activities, and 2) the economic value of water in the southeastern U.S. This thesis has three objectives: 1) build a Multi-Regional Input-Output (MRIO) model to describe multiregional transactions for the following analyses; 2) conduct a water footprint analysis to evaluate how much water use is required for meeting changes in final demand of specific region and economic sectors; 3) set up an MRIO Linear Programming (MRIO-LP) to determine water use demand curves for the southeastern U.S. The water footprint analysis indicates that water requirements embedded in the production of a good varies across study region. The MRIO-LP analysis reveals that economic transactions between regions have a significant impact on the water used to meet regional economic demand. The shadow value of water is higher when multi-regional transactions are introduced into the LP model. In general, the southeastern U.S. economy is less likely to experience water stress until the water availability decrease to 60% of the 2010 USGS level of 82,825,409 acre feet. At this level, the aggregated industry price for water in the southeastern U.S. ranges between 4,041 $/ac.ft. to 5,614 $/ac.ft., depending on assumptions pertaining to inter-regional transactions