A Hydro-Economic Approach to Representing Water Resources Impacts in Integrated Assessment Models

Grant Number DE-FG02-98ER62665 Office of Energy Research of the U.S. Department of Energy Abstract Many Integrated Assessment Models (IAM) divide the world into a small number of highly aggregated regions. Non-OECD countries are aggregated geographically into continental and multiple-continental regions or economically by development level. Current research suggests that these large scale aggregations cannot accurately represent potential water resources-related climate change impacts. In addition, IAMs do not explicitly model the flow regulation impacts of reservoir and ground water systems, the economics of water supply, or the demand for water in economic activities. Using the International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) model of the International Food Policy Research Institute (IFPRI) as a case study, this research implemented a set of methodologies to provide accurate representation of water resource climate change impacts in Integrated Assessment Models. There were also detailed examinations of key issues related to aggregated modeling including: modeling water consumption versus water withdrawals; ground and surface water interactions; development of reservoir cost curves; modeling of surface areas of aggregated reservoirs for estimating evaporation losses; and evaluating the importance of spatial scale in river basin modeling. The major findings include: - Continental or national or even large scale river basin aggregation of water supplies and demands do not accurately capture the impacts of climate change in the water and agricultural sector in IAMs. - Fortunately, there now exist gridden approaches (0.5 X 0.5 degrees) to model streamflows in a global analysis. The gridded approach to hydrologic modeling allows flexibility in aligning basin boundaries with national boundaries. This combined with GIS tools, high speed computers, and the growing availability of socio-economic gridded data bases allows assignment of demands to river basins to create hydro-economic zones that respect as much as possible both political and hydrologic integrity in different models. - To minimize pre-processing of data and add increased flexibility to modeling water resources and uses, it is recommended that water withdrawal demands be modeled, not consumptive requirements even though this makes the IAM more complex. - IAMs must consider changes in water availability for irrigation under climate change; ignoring them is more inaccurate than ignoring yield changes in crops under climate change. - Determining water availability and cost in river basins must include modeling streamflows, reservoirs and their operations, and ground water and its interaction with surface water. - Scale issues are important. The results from condensing demands and supplies in a large complex river basin to one node can be misleading for all uses under low flow conditions and instream flow uses under all conditions. Monthly is generally the most accurate scale for modeling river flows and demands. Challenges remain in integrating hydrologic units with political boundaries but the gridded approach to hydrologic modeling allows flexibility in aligning basin boundaries with political boundaries. - Using minimal reservoir cost data, it is possible to use basin topography to estimate reservoir storage costs. - Reservoir evaporation must be considered when assessing the usable water in a watershed. Several methods are available to estimate the relationship between aggregated storage surface area and storage volume. - For existing or future IAMs that can not use the appropriate aggregation for water, a water preprocessor may be required due the finer scale of hydrologic impacts