ECONOMIC IMPACT OF CLIMATE CHANGE ON WATER · 2010-02-08 · social and economic change can...

Thirteenth International Water Technology Conference, IWTC 13 2009, Hurghada, Egypt

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ECONOMIC IMPACT OF CLIMATE CHANGE ON WATER

Ali Abd Al-Rahman Ali

Professor of Agricultural Economics

Agricultural Economics Research Institute, Agricultural Research Center Ministry of Agriculture and Land Reclamation, Egypt

E-mail: [email protected] ABSTRACT The water stress poses a risk to economic growth, human rights, health, safety and national security. The challenge of securing safe and plentiful water is for all. The solution to water is more complex than the solution to climate change. This paper describes what climate change is, including how it is affecting the world we live in and the timeframe within which these changes are expected to happen. Both climate changes in the average or in the case of climate variability or to continue for a long time and which are usually decades or more. It includes increases in temperature, and sea level rise and changes in rainfall patterns, and increased frequency of extreme weather events. There is consensus that socio-economic and environmental drivers will be dominant in shaping future water management policies. At the same time, climate change will superimpose itself by modifying and, in critical regions, by increasing future risk. The study showed the mean of climate change and impacts it on water. So, what can be done? It showed climate change in Egypt, climate change on water resources, and economic impacts of climate changes. INTRODUCTION Global crisis from escalating demand for fresh water and inadequate supply are as urgent as efforts to tackle climate change. Told international business and civil society leaders assembled in "Davos" that water stress poses a risk to economic growth, human rights, health, safety and national security. The challenge of securing safe and plentiful water for all," said the Secretary-General, "is one of the most daunting challenges faced by the world today. The solution to water is more complex than the solution to climate change. But the panelists agreed the challenge could be solved, using collaborative approaches, political will, market mechanisms and innovative technology like those which arose in response to global warming. Market forces could work well under a cap-and-trade approach similar to those applied to carbon dioxide. Unless we put caps on the global warming pollution we’re throwing up into atmosphere, we’re walking into a hell for water shortages." Panelists agreed that no individual, firm or nation could escape the consequences of water scarcity.

Thirteenth International Water Technology Conference, IWTC 13 2009, Hurghada, Egypt 48

Meanwhile, efforts to extract more and alternative energy sources such as shale oil or biofuels only speed the depletion through their own requirements for water. The resource is also wasted, because it has no economic value, despite being the most precious and scarce resource of all. If we allow market forces to play a role in how to define the value of water, we could take a big step forward; panelists agreed that a certain amount of clean water for drinking should be seen as a human right. But water for farmers, industry, swimming pools or gardens needs to be priced to prevent waste and inefficiency. Fighting broke out between farmers and herders after the rains failed and water became scarce." Some 200,000 people died. Several million fled their homes. "But almost forgotten is the event that touched it off – drought, a shortage of life’s vital resource." Scientists around the world now agree that the climatic changes occurring internationally are the result of human activity. Although responsibility for the causes of climate change rests primarily with the developed and industrialized nations, the costs of climate change will be borne most directly by the poor. This is for a number of reasons, including: many of the regions most likely to be adversely affected fall in the developing world; the poor are disproportionately dependent on occupations, such as farming, that are adversely affected by climate change; and because the poor have very limited resources, they do not have the ability to adapt to climate change in the way that wealthier households can changes to water quality, quantity and availability will be an impact of ongoing. OBJECTIVES This paper describes what climate change is, including how it is affecting the world we live in and the timeframe within which these changes are expected to happen. It then considers why climate change needs to be a priority, as well as the impacts on the water resources. Is to maintain the management of change and climate change is one of the most important global challenges facing the international community and the environment today. Therefore, we must be taken to protect the heritage is in three points:

• Preventive action: Monitoring and reporting on climate change and mitigate the negative effects through the choices and decisions in a variety of levels: individual, society, institutions and companies.

• Corrective actions: A regional strategies and plans of the local administration.

• Sharing knowledge: Including best practices, research and communication, public and political support, education, training and capacity-building, networking.


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CLIMATE CHANGE Both climate changes in the average or in the case of climate variability or to continue for a long time and which are usually decades or more. It includes increases in temperature, and sea level rise and changes in rainfall patterns, and increased frequency of extreme weather events. It was not the changes that have occurred in the ice age / in the last 1.8 million years and that have emerged in the form of significant mutations within the spread of species in the reorganization of the Worlds distinct biological communities, landscapes and similar environment have occurred in a piecemeal fashion, as is the case today because of the pressure caused by various human activities. It has led to fragmentation of habitats make many types of limited space within the communities are relatively small compared with the previous decline in genetic diversity. With the monitoring of changes in the climate system, during the last decades of the twentieth century (such as: increasing concentrations of carbon dioxide in the atmosphere, increasing the temperature of the earth and the ocean, changes in seasons, rainfall, sea level rise), especially in the warmer regional temperatures. All of this has affected the timing of reproduction of animals and plants and / or migration of animals and the length of the growing season and species distributions and population sizes, and the frequency of outbreaks of pests and diseases. The projected changes in climate during the twentieth century atheist will be faster than in the past, at least faster than for 10,000 years and these changes will be accompanied by a change in land use and the spread of invasive alien species, is likely to limit the ability of these changes of species to migrate, as well as its ability to continue to live in fragmented habitats, and it will be done through:

• The impact on some fragile ecosystems, in particular, climate change, such change the composition and formation of biological communities due to climate change caused by the type and extent of change and species extinction.

All of these physical and biological changes affecting the functioning of ecosystems, just as is the case in the cycle of food, and the provision of ecosystem goods and services with significant impacts on human resources. Thus, affected by social and economic activities as well, including agriculture, fishing and tourism are

• The movement of the scope of climate change for many species in the direction of the poles or up from their present positions.

• Extinction of many species that were the subject of the risk of extinction. • Changes in the frequency and intensity and extent of sites and other climatic

disturbances, which affect climate change how existing environmental regulations and to what extent by groups of new plant and animal.


increasingly, through changes in the supply of fresh water. The interactions of climate change with the other forces of global change, such as land-use change and social and economic change can exacerbate the potential impacts on human beings and their environment. It has made climate change the outcome of the whole of mankind, including those produced by human creativity. By 2050, scientists project a loss of at least 25 percent of the Sierra snow pack, an important source of urban, agricultural and environmental water. It is likely that more of our precipitation will be in the form of rain because of warmer temperatures, increasing the risk of flooding. More variable weather patterns may also result in increased dryness in many regions of the world. The scientists of Water Resources are beginning to address these impacts through mitigation and adaptation measures to ensure an adequate water supply now and in the future. The team is tasked with finding solutions to climate change impacts on future planning and operations, and stays abreast of current research. Climate Change Predictions:

• GHG emissions have been rising since industrialisation in the 1900s, due to increased burning of fossil fuels.

• IEA World Energy Outlook predicts a 53% increase in global primary energy demand by 2030, with 70% of that coming from developing countries.

• Assessments of future global temperature increase vary from 1.4 to 5.8 degrees Celsius.

• According to the Stern review on the economics of Climate Change, there is a 63% chance of exceeding the declared ‘dangerous’ limit of 2 degrees Celsius temperature increase.

• At a certain threshold, the ability of the ocean as well as soil and plants to absorb CO2 (currently considered a carbon “sink”) may reduce or even reverse, thus removing an important source of carbon storage.

• Large-scale, irreversible system disruption and the destabilisation of the Antarctic ice sheets are serious risks: changes to polar ice, glaciers and rainfall regimes have already occurred.

Impacts Climate: Change Impacts:

• Agriculture: Declining crop yields are likely to leave hundreds of millions without the ability to produce or purchase sufficient food supplies.

• Ecosystems: Forests, land types and species will die back in some areas, but increase in others.

• Health: High temperatures expand the range of some dangerous vector-borne diseases, such as malaria. Water-borne diseases will also increase in wet areas. Heat waves will affect health.


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• Sea level rise: Greater erosion and flooding, plus salt water contamination of groundwater supplies and low-lying coastal land.

Climate Change Impacts There is consensus that socio-economic and environmental drivers will be dominant in shaping future water management policies. At the same time, climate change will superimpose itself by modifying and, in critical regions, by increasing future risk and vulnerability of crop production related to water supply and water availability. Two broad issues that need to be addressed for effective responses emerge: • When and where will significant impacts to food production occur due to climate

change? • What water management and production systems will face additional significant

climate risk? Impact on crop production and water management systems in coming decades. In addition, there is the potential for earlier negative surprises linked to increased frequency of extreme events. The strong trends in climate change that are already evident, the likelihood of further changes and the increasing magnitude of potential climate impacts particularly in the mid-latitudes and tropical regions. With the accepted limitations of global agro-ecological modeling frameworks, projections for irrigated water withdrawals to 2080 indicate the pressure on renewable water resources and associated ecosystems that can be anticipated. While the progression of temperature and crop evapotranspiration means may be incremental, the increased variability of rainfall events will increase the volatility of rainfed production at local and regional levels. Improvements in the performance of irrigated areas at smallholder and scheme level are expected under baseline conditions but some marginal schemes will risk being taken out of production if anticipated regional impacts take effect. The spatial distribution of the annual hydrological cycles and the inter-annual trends (persistence) will result in basin-to-basin variation. Hence groundwater recharge, precipitation intensity-duration-frequency relationships, extreme hydrological events and salinity related to evaporation and water-logging are all expected to reach thresholds at which irrigated production is compromised. The probable changes in precipitation and evaporation will translate directly to shifts in the existing pattern of soil moisture deficits, groundwater recharge and runoff. With respect to cropping calendars, the most immediate impacts will be felt by rainfed agriculture whose yield performance is expected to exhibit more volatility as a result of moisture stress in regions with declining rainfall. In areas experiencing increased rainfall and temperature, higher intensity rainfall may damage crops and erode soils Second order impacts on stream flow, groundwater, lake and dam storage levels and wetland contraction or expansion will translate into changed


availability of water for irrigated production, aquaculture and in situ environmental services including capture fisheries and associated biodiversity. Separating the impacts and responses to climate change from those related to other trends in agriculture and related economic sectors will not be straightforward, since autonomous adaptation will be driven by all of these factors at the same time. The challenge at hand is therefore to devise decision-support systems that include monitoring and forecasting and observations of ongoing socio-economic drivers. Such systems can indicate to decision makers the envelop of potential planned action, from timing of new infrastructure to governance and capacity building in the water management sector.

• Temperature affects: • The oxygen content of the water (oxygen levels become lower as

temperature increases). • The rate of photosynthesis by aquatic plants. • The metabolic rates of aquatic organisms. • The sensitivity of organisms to toxic wastes, parasites, and diseases.

• Causes of temperature change include: • Weather • Removal of shading stream bank vegetation. • Impoundments (a body of water confined by a barrier, such as a dam. • Discharge of cooling water. • Urban storm water. • Groundwater inflows to the stream.

What can be done? MITIGATION:

• Deals with the causes of climate change. • Reduce the levels of GHGs in the atmosphere. • Use of appropriate technology to reduce emissions. • Examples: energy efficiency; renewable energy; carbon trading.

ADAPTATION:

• Deals with the effects of climate change. • Responses to moderate the harm, or take advantage of the opportunities. • Measures must be integrated within development activities, and increase

adaptive capacity. At the community level, adaptation measures include some of the following institutional:

– Local watershed management – make authorities more accountable for managing in the interest of all stakeholders, including domestic water users.

– Awareness-raising – build the links between climate changes and water resources at a local level.


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– Household water conservation – encourage the use of grey water for washing, bathing, and water gardens and livestock

– Use of contour bunding, gully plugging, and check dams and dykes to catch rainwater.

– Promote rainwater harvesting (i.e. from rooftops) and tanks to augment existing supplies.

– Design raised hand-pumps to protect drinking water from flood contamination.

– In advocacy, adaptation measures include some of the following changes. Climate Change in Egypt Egypt rose by the warnings of the possibility that climate change is leading a tendency to appear on the results of environmental and geographical serious. The play within the play to be flooded and the disappearance of coastal areas in the Nile Delta in the sea water by melting snow in the north and south poles, which led to the occurrence of global warming. The Cairo had witnessed the launch of the report of the fourth Global Environment Outlook, prepared by 390 experts, and reviewed by more than a thousand environmental experts around the world sponsored by the United Nations Environment Program. Participated in the launch of the Cairo Center for Environment and Development for the Arab Region and Europe and the League of Arab States are represented in the Council of Ministers of the Environment, where the report confirmed that climate change is a global challenge and will have significant impacts on the long-term human well-being and development. The greenhouse on the global temperature to the period since 1995 till last year, 2006 was among the most years, temperatures on the ground since 1850. The evidence of global warming is shrinking the number of glaciers and melting permafrost and the crash of the early ice rivers and lakes, and the prolongation of the chapters of growth in the supply lines that stretch from the average high and changing ocean currents and to increase tension and strongly heat waves, storms, floods and drought in some areas. The affect change in the availability of water and food security dramatically millions of people, as rising sea-level population and major economic centers, both in coastal areas but also threatens the very existence of small island states the same. The experts identifies sources of threat in what is going on a series of climatic changes and a slowdown in the policies of developed countries to extend a helping hand to developing countries in reducing emissions of greenhouse gases which cause global warming. On the other hand, the experts prepare a map showing the future effects of this phenomenon came to Egypt, especially the region of Sidi Krir to the grenade in the northern coast. They pointed out that the rubble caused by the drilling of the Suez Canal, which was developed on both sides of the channel led to a rise in land and protect the Suez Canal from drowning in the future. They also predicted the sinking of parts of the cities and the pomegranate and Borvwad


Qantara and rain-fed and downloaded, Damietta, and Baltim and Varschor Alkhalalp and Alhamul and Sidi Salem and Rashid Idwina Damanhour, Kafr Al-Dawar and Obokir and Oboualemtamir. They added that the area Stgmrha of water in the Nile Delta is estimated at 1.4 million acres, which represents 25% of agricultural land in Egypt, which has an area of 6 million acres, stressing that the risks to the delta was much higher than the northern coast. They also pointed out that the Nile Delta are also of the continuing decline of its own rate of 1 to 5 millimeters a year as a result of changes in addition to the biological vulnerability to erosion as a result of water currents on the Mediterranean shore. In Egypt has reached about (106,608 GB grams) of carbon dioxide equivalent of 71% energy sectors, agriculture 15%, industry 9% and 5% waste. In spite of Egypt that the emissions of greenhouse gases account for only 0.57% of the total emissions of the world that Egypt is one of the most affected countries in the world from the effects of climate change. Year, the amount of emissions in Egypt. Million tons, equivalent to the amount of carbon dioxide: 1990 / 1991------ 107 (0.40%) Emissions for the world. 2004 / 2005------ 150 (0.55%) Emissions for the world. 2005 / 2006------ 152 (0.57%) Emissions for the world. WATER The vast majority of the Earth's water resources are salt water, with only 2.5% being fresh water. Approximately 70% of the fresh water available on the planet is frozen in the icecaps of Antarctica and Greenland leaving the remaining 0.7% of total water resources worldwide available for consumption. However from this 0.7%, roughly 87% is allocated to agricultural purposes. These statistics are particularly illustrative of the drastic problem of water scarcity facing humanity. Water scarcity is defined as per capita supplies less than 1700 m3/year. The Comprehensive Assessment of Water Management in Agriculture revealed that one in three people are already facing water shortages (2007). Around 1.2 billion people, or almost one-fifth of the world's population, live in areas of physical scarcity, while another 1.6 billion people, or almost one quarter of the necessary infrastructure to take water from rivers and aquifers); nearly all of which are in the developing countries. The water cycle includes:

•••• Precipitation events: rain, fog, mist, snow. •••• Infiltration and ground and surface water flow events with eventual

discharge into creeks and rivers.


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•••• Intercepting this process is the vegetation process of root adsorption. •••• Water enters back into the atmosphere in the form of water vapors through

transpiration (plants) and evapotranspiration (water bodies). •••• Vapors condense, form clouds, and result in another precipitation event.

There are four main factors aggravating water scarcity:

• Population growth: in the last century, world population has tripled. It is expected to rise from the present 6.5 billion to 8.9 billion by 2050.

• Water use has been growing at more than twice the rate of population increase in the last century, and, although there is no global water scarcity as such, an increasing number of regions are chronically short of water.

• Increased urbanization will focus on the demand for water among an ever more concentrated population. Asian cities alone are expected to grow by 1 billion people in the next 20 years.

• High level of consumption: as the world becomes more developed, the amount of domestic water that each person uses is expected to rise significantly.

• Climate change will shrink the resources of freshwater. Water and Climate Change Of all the climatic factors, the daily and inter-annual variations in precipitation are most crucial for rainfed and runoff for irrigated production. In both rainfed and irrigated systems, the spatial and temporal variation of precipitation is key. The day-to-day variability of rainfall associated with weather is the major risk factor for most forms of agriculture. Soil moisture deficits, crop damage weather are the major risk factor for most forms of agriculture. Soil moisture deficits, crop damage and crop disease are all driven by rainfall and associated humidity. The variability in rainfall intensity and duration makes the performance of agricultural systems in relation to long-term climate trends very difficult to anticipate. This is particularly the case for rainfed production. Either there is replenishment of soil moisture storage as a result of rainfall or there is not. Cultivation practices, including soil biomass enhancement as well as tree/forest cover, can enhance the infiltration of rainfall and delay the drainage of soil moisture in some soil types but, ultimately, soils drain to groundwater circulation or lose water through evaporation and evapotranspiration. Agricultural water management permits concentration of inputs and provides stability of supply for many key agricultural products. While only responsible for some 40 percent of agricultural production, this stability of supply buffers the volatility of rainfed production and is therefore a key supply factor in local, regional and global agriculture markets, including markets in animal products. In addition, basin-level water resource management determines the productivity of water-related ecosystems including local fish capture. Without some form of water control across the world’s river basins, freshwater lakes and associated aquifers, local, regional


and global food security would not be possible. In addition, since irrigated areas are limited to a few dominant food and cash crops, notably rice, wheat, maize, vegetables pulses and cotton consideration for assessing the impact of climate change on agricultural production is an examination of how particular irrigated crops will perform across specific river basins under climate. Climate Change, Impact on Water Resources: Quantity of Water:

• For many regions of the globe, future climate change will be characterised by less rainfall and increasing temperatures, severely reducing the availability of water for drinking, household use, agriculture, and industry. Unfortunately, many of these areas also include the world’s poorest countries, which already struggle under existing water stress.

• The Stockholm Environment Institute estimates that, based on only a moderate climate change, by 2025 the proportion of the world’s population living in countries of significant water stress will increase from approximately 34% (in 1995) to 63%.

Quality of Water:

• Changes in the amounts or patterns of precipitation will change the route / residence time of water in the watershed, thereby affecting its quality. As a result, regardless of quantity, water could become unsuitable as a resource.

• Higher ocean levels will lead to salt water intrusion in groundwater supplies, threatening the quality and quantity of freshwater access to large populations.

– This is already occurring in Israel and Thailand, in small islands in the Pacific and Indian Oceans and the Caribbean Sea, as well as in some of the world’s most productive deltas, such as China’s Yangtze Delta and Vietnam’s Mekong Delta.

Accessibility of Water

• As water quantities and quality decrease, competition for available resources will intensify.

• Agriculture has always been the dominant end-use of diverted water; this will only intensify with increasing needs for irrigation brought on by higher temperatures and reduced precipitation, coupled with increasing populations.

• Meanwhile, demands of industry are expected to become a greater issue in the competition for dwindling resources, since industrial water supplies are generally extracted from groundwater.

• In the event of decreasing water tables, industrial needs will be forced to compete with agricultural and domestic water supply sources, and could lead to conflict.


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Consequences for Human Populations: Impacts to Agriculture and Food Security

• Agriculture will be one of the hardest-hit sectors, reinforcing the unequal distribution of impacts.

• In sub-Saharan Africa, where up to 90% of agriculture is rain fed, the sector accounts for 70% of employment and 35% of GNP.

• Changes in water regimes will render some areas unsuitable for traditionally-grown products, while others will become susceptible to new forms of crop and livestock diseases.

Health Impacts

• Currently, more than 3 million people die each year from avoidable water-related disease, most of who are in developing countries.

• The effects of climate change on water will contribute directly to disease transmission through water-borne, -washed, -based, -related and -dispersed diseases.

Decreases in Economic Activity:

• Reductions in water quantity and quality will require people, particularly women and children, to spend increased time gathering water, detracting from employment and educational opportunities.

• A greater proportion of household income may need to be spent on water delivered from private sources, such as tankers, to supplement lack of water locally.

• Decreases in water availability will reduce the amount of industry and hence inputs to the local economy.

Conflict Over Water Resources • This may exacerbate conflict in existing water stressed areas competing

locally for access to natural springs and rivers, as well as lead to conflicts on a larger international trans-boundary scale.

The impact of climate change on the Nile: One of the scenarios developed by climate scientists to cause global warming in Egypt to accelerate the evaporation of the Nile water and therefore reduce the freshwater resources, which in turn will aggravate the acute shortage faced by the country in the area of drinking water, irrigation and power generation. This could be for such a scenario, the consequences of social and economic consequences, one of Egypt's inabilities to feed its people of the soldiers about 80 million people. However, experts remain contradictory expectations, they are not sure whether the climate change such a negative impact on the Nile, as they say that Egypt is facing


enormous challenges with regard to the management of water resources, population pressure due to the large and growing demand for water and electricity. But it is not clear how it will affect the flow of the Nile. The experts say that it is essential to assess the impact the major sites. The Nile provides 95 percent of the total water required by Egypt for irrigation and industrial activities and economic development. Most of the population is concentrated in the narrow stretch along the Nile Delta and in the Sahel. Although the Nile valley and Delta accounts for only 4.0 percent of Egypt's area. Therefore, the country remains vulnerable to any negative impacts of climate change on water availability in the coastal areas in the Nile. Climatic change and climatic variability can have a dramatic impact on water supplies, with the most obvious being drought. But even high precipitation provides no guarantee of adequate water if the inflow does not come at the right time. New policy for managing water resources: How to overcome the weaknesses in water resources has been the subject of much international discussion. At the June 1992 United Nations conference on Environment and Development in Rio de Janeiro, member countries endorsed policies that stress integrated water resources management" based on the perception of water as an integral part of the ecosystem, a natural resource and social and economic good. "They also stressed' the implementation of allocation decisions through demand management, pricing mechanisms, and regulatory measures." These policies reflect the current worldwide consensus on moving away from past approaches that tended to center on developing new sources of water a (supply) focus. The new emphasis is on economic behavior, policies, and technologies for increasing the efficiency of water use (demand). Among the measures adopting:

• Applying a comprehensive analytical framework, incorporating cross- sectoral and environmental considerations.

• Placing greater emphasis on incentives for efficiency and financial accountability.

• Establishing strong laws and regulations. • Decentralizing water service delivery. • Prescribing and encouraging the participation of stakeholders. • Protecting, enhancing, and restoring water quality and water dependent

ecosystems. • Assigning greater priority to the provision of adequate services for the poor. • Supporting research, development, and adoption of low-cost technologies to

conserve water and enhance its quality.


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Water Markets: Throughout history, one of the major determinants of successful societies has been their ability to provide a safe and reliable supply of water for their members. Techniques to do so have continually evolved since the inception of irrigation in before. Recently, many economists and environmentalists hove touted" water markets" as the most promising tool for use in water management. These markets involve the annual or permanent transfer of the water use rights between a willing buyer and a willing seller in exchange for compensation determined by supply and demand, the cost of mobility(i.e., the cost of building of supply, and the cost of mitigating any environmental and third- party effects. This transfer value should not be confused with the price of tariff paid annually for the use of the water, a rate that should reflect the full recovery of the pro rata costs of administration, operation, maintenance and capital recovery. This rate, set on an escalating waste and inefficient. The advantages of water markets include:

• Increased efficiency. • Delay of new infrastructure. • Removal of political favoritism.

If water market offers so many advantages, why are they not used universally? The reason is that a successful market relies upon certain prerequisite conditions that may be difficult for a given country to meet for political, economic, or cultural reasons. Without these conditions, a functioning market cannot succeed. The conditions are:

• A definable right. • Greater demand than supply. • Societal acceptance. • A good administrative and regulatory structure. • Sufficient mobility. • A fair and equitable initial allocation system. • A fair reallocation system.

Watershed management organization: • Social Component • Ecological Component • Economic Component. • A strong watershed structure:

• uses sound science • facilitates communication and partnerships • fosters actions that are well planned and cost effective • stimulates actions and tracks results

• Economic Components: • Watershed Economics and Ecosystems • Watershed Protection Economics • Funding Sources

• Watershed economics and ecosystems:


• The nations gross domestic product (GDP) is considered the nation’s barometer of economic well-being.

• Ecosystem services are important in our day to day lives. Since these fundamental services were in place long before the introduction of humans and operate at a very large scale, they are easily taken for granted.

• Ecosystem services do not have a price: • Water regulation is a function of hydrological flows. • Water supply is a function of storage and retention (wetlands, ponds,

streams, etc.) in the watershed. • Erosion control is a function of soil retention within an ecosystem. • Waste treatment is a function of a wetlands ability to remove or

breakdown excess nutrients. • GDP’s failures:

• The GDP is merely a gross tally of products and services bought and sold. There is no distinction made between transactions of what adds to or distracts from a watershed’s well-being.

• If something lacks a price (e.g., water regulation, erosion control, water treatment, etc.) regardless of its importance to our health or welfare it is not included in the GDP.

• If a transaction (e.g., land use change) destroys an ecosystem service, it is considered an economic gain under the GDP method.

• Watershed protection economics: • There is never enough money for watershed protection and watershed

managers must make careful choices about how to spend their limited resources.

• Placing a value on our watersheds and its site specific characteristics such as soil type, land use, land cover, etc. is important for deciding the best future land use patterns in the watershed.

• Studies are becoming available to help begin to understand and value water resources.

• Public trust vs. private property rights: • Groups such as developers, farmers, realtors may argue that a person

owning land has a right to develop it as they please. Taking of the use of this land must be compensated according to the value of the property.

• Public trust has an obligation to safeguard the public health, safety, and welfare of the public.

• The value of land is an important consideration and should be assessed with ecosystem services in mind.

• Balancing development and protection: • Watershed development does not have to be synonymous with

resource degradation.


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• Growth managed in a watershed context can locate and design homes and businesses in a way that will reduce or eliminate impacts in the watershed.

• Protecting a watershed requires, good planning to protect forest cover, provide storage, and reduce impervious cover to the extent necessary for natural resource protection.

• Watershed planning considerations: • Direct appropriate level of new growth to the subwatersheds that can

best afford and accommodate the changes. • Requires investment of time and money for technical studies,

monitoring, decision-making, etc. • Citizens rank protection of water resources highly. A North Carolina

survey showed a strong preference for spending more public funds on environmental protection than highway construction, welfare, or economic development. Only crime and education ranked as higher spending priorities among citizens.

• Watershed protection programs: • Educating citizens and businesses about their daily role in protecting

the quality of the watershed is on-going. • Investment in programs on watershed education, public participation,

monitoring, inspection of on-site treatment systems, low input lawn care, household hazardous waste, business pollution prevention is a key element in the protection of the watershed.

• Management and application costs are often generated by local government. Preventing impacts maintains ecosystem integrity and reduces restoration costs.

• Funding Sources: • The three more common types of funding mechanisms for watershed

programs are: • General revenues • Permit fees • Dedicated revenues (i.e., storm water utility fees) • Grants • Loans • Tax levies

• General revenues: • General revenues come from local government revenues (income, fees,

fines, etc.). It is used by all levels of government to fund programs and service.

• Generally stable during economic downturns. • Allocation is highly variable and watershed protection is often

considered a low priority. • Permit fees:

• Permit fees place the cost of watershed programs on those who create the need for the service. Fees may be assessed on the basis of the


amount of area disturbed, type of development (i.e., residential, commercial), or the amount of land developed.

• Disadvantages include: burden to collect fees, dependent on the level of growth in the community, and the potential for fees to be diverted into a general agency fund rather than used for watershed management.

Economic impacts of climate change: Let us first examine the Stern Review conclusion that climate change will cause economic disruption now and forever. The “now and forever” is preposterous. The world economy is growing briskly; immediate threats to economic growth are imbalances in the USA, overheating in China, and lack of reform in the EU. But the “forever” part is also problematic. It assumes that society will never get used to higher temperatures, changed rainfall patterns, or higher sea levels. This is a rather dim view of human ingenuity. It contradicts what we know about technological progress, adaptation, and evolution. Climate change would hamper agricultural productivity in some parts of the world, particularly Africa. This would be a problem in today’s world. However, in all of the socio-economic scenarios used by the Stern Review, African economies would grow rapidly. This is inconsistent with famine. Middle-income countries would import food (global food production is not threatened by climate change) rather than starve. Furthermore, it is hard to imagine rapid economic growth without substantial improvements in agriculture productivity; at present, African agriculture is particularly inefficient. Although a single model makes for easy presentation, it also implies a lack of robustness. Integrated assessment models differ considerably in their representation of impacts. Cost-benefit analysis and emission reduction targets The Stern Review overestimates the impacts of climate change, and therefore the benefits of emission reduction. Its estimates of the costs of emission reduction are largely inspired by the Innovation Modeling Comparison Project. High benefits and low costs together imply that the Stern Review recommends more stringent emission reduction than the standard cost-benefit analysis. Stern Review does not, in fact, present a formal cost-benefit analysis. Instead, it compares the magnitudes of the costs of abatement (around 1% of GDP) to the costs of climate change (5-20% of GDP) and concludes that the latter justifies the former. There are two mistakes here. Firstly, the costs of climate change do not equal the benefits of emission reduction – any abatement will only slow climate change rather than avoid it altogether – therefore, the benefits of emission reduction are smaller than the costs of climate change. Secondly, marginal costs should be compared to marginal benefits, rather than total costs to total benefits. The Stern Review is silent on marginal abatement costs. It does report marginal damage costs though.


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Uncertainty and Economic Analysis: Two uncertainties in the climate models hold special significance for economic analysis of possible impacts: First: the models contain uncertainty about the long-term trend in regional precipitation. Scientists cannot now say whether the warming trend will bring a somewhat wetter, or somewhat drier, climate regime to our region, although most of the climate models assessed by the Climate Impacts Groups at the University of Washington project wetter winters . While changes in total precipitation are not expected to affect the overall trend towards declining snow pack and shrinking summer water supplies (determined by the temperature trend), changes in seasonal precipitation patterns and water availability do impact economic activities. Second: the subject to sea surface temperature phenomena that contribute substantially to climate variability. The effects of such ocean temperature phenomena can be strong enough to temporarily mask or reinforce underlying long-term climate trends. Climate scientists are working hard to better understand the region’s “true” climatic variability, but the complex interactions of regional and global factors suggest that policy makers should not expect global warming to unfold in a consistent or entirely predictable pattern. This makes the job of anticipating economic impacts more difficult. Third: climate scientists now acknowledge that abrupt changes to the global climate system are possible and, under the higher-end warming scenarios, may be increasingly probable. A temperature-distributing current called the thermohaline circulation (the great ocean conveyor). Such low probability events, once begun, may be essentially irreversible and could be extremely costly to Oregon: the collapse of the West Antarctic Ice Sheet, for example, could raise sea levels by 26 feet over time. A change of this magnitude would re-draw the Oregon coastline. Responsible economic analysis attempts to take such low-probability, high-risk outcomes into account. In summary, the reality and direction of global warming are no longer in question. The pace of climate change remains less certain. Shifts in future precipitation trends are unknown, but will occur. Scientists have raised real concerns about abrupt climate change that could impose very high costs on the Oregon economy. Each of these uncertainties reinforces a case for taking prudent steps to estimate and insure against the risks associated with the warming trend. Ricardian Model: The Ricardian model is a cross-sectional approach to studying agricultural production. It was named after David Ricardo (1772–1823) because of his original


observation that the value of land would reflect its net productivity. Farmland net revenues (V) reflect net productivity. This principle is captured in the following equation: V = P Qi (X, F, H, Z, G)i - P Xi (1) Where P is the market price of crop i, Q is the output of crop i, X is a vector of purchased inputs (other than land), F is a vector of climate variables, H is water flow, Z is a set of soil variables, G is a set of economic variables such as market access and P is a vector of input prices. The farmer is assumed to choose X to maximize net revenues given the characteristics of the farm and market prices. The Ricardian model is a reduced form model that examines how several exogenous variables, F, H, Z and G, affect farm value. The standard Ricardian model relies on a quadratic formulation of climate: V = F + H + Z + G + u (2) Where u is an error term. Both a linear and a quadratic term for temperature and precipitation are introduced. The expected marginal impact of a single climate variable on farm net revenue evaluated at the mean is: E[dV/df]= b + 2*b*E[f] (3) The quadratic term reflects the nonlinear shape of the net revenue of the climate response function (Equation 2). When the quadratic term is positive, the net revenue function is U-shaped and when the quadratic term is negative, the function is hill-shaped. We expect, based on agronomic research and previous cross-sectional analyses, that farm value will have a hill-shaped relationship with temperature. For each crop there is a known temperature at which that crop grows best across the seasons. Crops consistently exhibit a hill-shaped relationship with annual temperature, although the peak of that hill varies with each crop. The relationship of seasonal climate variables, however, is more complex and may include a mixture of positive and negative coefficients across seasons. If the change increases net income it will be beneficial and if it decreases net income it will be harmful. Cross-sectional observations across different climates can reveal the climate sensitivity of farms. The advantage of this empirical approach is that the method not only includes the direct effect of climate on productivity but also the adaptation response by farmers to local climate. This farmer behavior is important because it mitigates the problems associated with less than optimal environmental conditions. Analyses that do not include efficient adaptation (such as the early agronomic studies) overestimate the damages associated with any deviation from the optimum. Adaptation thus explains both the more optimistic results found with the Ricardian method and the generally pessimistic results found with purely agronomic studies.


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Adaptation is clearly costly. The Ricardian model takes into account the costs of different alternatives. For example, if a farmer decides to introduce a new crop on his land as climate warms, the Ricardian model assumes the farmer will pay the costs normally associated with growing that new crop. That is, the farmer will have to pay for new seeds and new equipment specific to the crop. The Ricardian model does not, however, measure transition costs. For example, if a farmer has crop failures for a year or two as he learns about a new crop, this transition cost is not reflected in the analysis. Similarly, if the farmer makes the decision to move to a new crop suddenly, the model does not capture the cost of decommissioning capital equipment prematurely. Transition costs are clearly very important in sectors where there is extensive capital that cannot easily be changed. For example, studies of timber show that modeling the transition is absolutely necessary in order to reflect how difficult it is to change the forest stock. Although agriculture adapts quickly to changes in prices, many intertemporal agricultural studies argue that farms will have more difficulty adapting quickly to climate change how slowly some innovations in modern agriculture have spread in Africa in particular, transition costs may be very important. Another drawback of the Ricardian approach is that it cannot measure the effect of variables that do not vary across space. Specifically, this approach cannot detect the effect of different levels of carbon dioxide since carbon dioxide levels are generally the same across the world. Changes in carbon dioxide levels have occurred over recent decades. In principle, one might by looking at productivity over time. However, it is impossible to distinguish the effect of the carbon dioxide changes from the much larger effect of technical changes that have occurred across the same time period. The best evidence about the magnitude of the fertilization effects of carbon dioxide comes from controlled experiments. These studies report an almost universal fertilization effect for all crops, although the magnitude of this effect varies from crop to crop. In most cases, the laboratory experiments have been done in near ideal conditions where other nutrients are freely available. In practice, if nutrients are scarce, the fertilization benefits from increased carbon dioxide levels may be lower. Thus in many developing countries, where fertilizers are not fully applied, the actual carbon fertilization benefits may be less than 30%. Another potential drawback is that the variation in climate that one could observe across space may not resemble the change in climate that will happen over time. For example, the temperature range across space could be small relative to the change in temperature over the next century. This explains why one may not be able to estimate a Ricardian model in small countries. If the range of climates in a country is small, one cannot detect how climate might. CONCLUSION Global crisis from escalating demand for fresh water and inadequate supply are as urgent as efforts to tackle climate change. Told international business and civil society leaders assembled in "Davos" that water stress poses a risk to economic


growth, human rights, health, safety and national security. This paper describes what climate change is, including how it is affecting the world we live in and the timeframe within which these changes are expected to happen. It then considers why climate change needs to be a priority, as well as the impacts on the water resources. Is to maintain the management of change and climate change is one of the most important global challenges facing the international community and the environment today. By 2050, scientists project a loss of at least 25 percent of the Sierra snow pack, an important source of urban, agricultural and environmental water. It is likely that more of our precipitation will be in the form of rain because of warmer temperatures, increasing the risk of flooding. More variable weather patterns may also result in increased dryness in many regions of the world. The scientists of Water Resources are beginning to address these impacts through mitigation and adaptation measures to ensure an adequate water supply now and in the future. The team is tasked with finding solutions to climate change impacts on future planning and operations, and stays abreast of current research. What can be done?, this more important, we can done through: deals with the causes of climate change, reduce the levels of GHGs in the atmosphere, measures must be integrated within development activities, and increase adaptive capacity and responses to moderate the harm, or take advantage of the opportunities. REFERENCES 1. Center for Watershed Protection. 1998. Rapid Watershed Planning Handbook.

Center for Watershed Protection. Ellicott City, Maryland. http://www.cwp.org. 2. Ministry of Environment and Energy and Ministry of Natural Resources. 1993.

Water Management on a Watershed Basis: Implementing an Ecosystem Approach, Ontario, Canada. 32 pp.

3. Center for Watershed Protection. Rapid Watershed Planning Handbook. 1998. 4. Intergovernmental Panel on climate change, 2007. Climate. 5. Asrar, G., J.A. Kaye, and P. Morel. 2001. "NASA Research Strategy for Earth

System. 6. 2007. Climate Change 2007: Mitigation. Contribution of Working Group III to

the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.

7. Climate Change 2007: The Physical Science Basis. Contribution of Working Group.

8. 2001. Coastal Zones and Marine Ecosystems. In: IPCC. 2001. Climate Change.

9. 2001: Impacts, Adaptation and Vulnerability. Contribution of Working Group II.

10. California Department of Water Resources. 2005. Department of Water Resources.

11. Bulletin 160-05. California Water Plan Update 2005: A Framework for Action.


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12. http://www.waterplan.water.ca.gov/previous/cwpu2005/index.cfm 13. McKnight, E. Mills, and D. Schimel. 2001. North America. In: IPCC. 2001.

Climate 14. Change 2001: Impacts, Adaptation, and Vulnerability. Contribution of

Working. 15. Change 2007: The Physical Science Basis. Contribution of Working Group I

to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.

16. http://www.epri.com. 17. http://www.eia.doe.gov//cneaf/electricity/epm/table1_1.html 18. EPA. 2007a. Climate Change Website. Climate Change—Science. 19. http://www.epa.gov/climatechange/science/index.html. 20. EPA. 2007c. Climate Change Website. Climate Change–Science: Future

Temperature 21. http://www.epa.gov/climatechange/science/recentpsc.html. 22. EPA. 2007e. Climate Change Website. Climate Change–Science: Future

Precipitation and Storm Changes. 23. EPA. 2007f. Climate Change Website. Climate Change–Science: Sea Level

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Level. 25. EPA. 2007h. Climate Change Website. Climate Change–Health

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Examples of Impacts of Climate Change

Temp rise (°C)

Water

Food

Health

Land

Environment

Abrupt and Large- Scale Impacts

1°C

Small glaciers in the Andes disappear completely, threatening water supplies for 50 million people

Modest increases in cereal yields in temperate regions

At least 300,000 people each year die from climate related diseases (predominantly diarrhoea, malaria, and malnutrition) Reduction in winter mortality in higher latitudes (Northern Europe, USA)

Permafrost thawing damages buildings and roads in parts of Canada and Russia

At least 10 percent of land species facing extinction (according to one estimate) 80 percent bleaching of coral reefs, including Great Barrier Reef

Atlantic Thermohaline Circulation starts to weaken

2°C

Potentially 20 - 30 percent decrease in water availability in some vulnerable regions, e.g. Southern Africa and Mediterranean

Sharp declines in crop yield in tropical regions (5 - 10 percent in Africa)

40 – 60 million more people exposed to malaria in Africa

Up to 10 million more people affected by coastal flooding each year

15 – 40 percent of species facing extinction (according to one estimate). High risk of extinction of Arctic species, including polar bear and caribou

3°C

In Southern Europe, serious droughts occur once every 10 years 1 – 4 billion more people suffer water shortages, while 1 – 5 billion gain water, which may increase flood risk

150 - 550 additional millions at risk of hunger (if carbon fertilisation weak) Agricultural yields in higher latitudes likely to peak

1 – 3 million more people die from malnutrition (if carbon fertilisation weak)

1 – 170 million more people affected by coastal flooding each year

20 – 50 percent of species facing extinction (according to one estimate), including 25 – 60 percent mammals, 30 – 40 percent birds and 15 – 70 percent butterflies in South Africa. Onset of Amazon forest collapse (some models only)

4°C

Potentially 30 -50 percent decrease in water availability in Southern Africa and Mediterranean

Agricultural yields decline by 15- 35 percent in Africa, and entire regions out of production (e.g. parts of Australia)

Up to 80 million more people exposed to malaria in Africa

7 – 300 million more people affected by coastal flooding each year

Loss of around half Arctic tundra. Around half of all the world’s nature reserves cannot fulfill objectives

5°C

Possible disappearance of large glaciers in Himalayas, affecting one-quarter of China’s population and hundreds of millions in India

Continued increase in ocean acidity seriously disrupting marine ecosystems and possibly fish stocks

Sea level rise threatens small islands, low-lying coastal areas (Florida) and major world cities such as New York, London, and Tokyo

Potential for Greenland ice sheet to begin melting irreversibly, accelerating sea level rise and committing world to an eventual 7m sea level rise. Rising risk of abrupt changes to atmospheric circulations, e.g. the monsoon. Rising risk of collapse of West Antarctic Ice Sheet. Rising risk of collapse of Atlantic Thermohaline Circulation

More than 5°C

The latest science suggests that the Earth’s average temperature will rise by even more than 5 or 6°C if emissions continue to grow and positive feedbacks amplify the warming effect of greenhouse gases (e.g. release of carbon dioxide from soils or methane from permafrost). This level of global temperature rise would be equivalent to the amount of warming that occurred between the last age and today – and is likely to lead to major disruption and large-scale movement of population. Such “socially contingent” effects could be catastrophic, but are currently very hard to capture with current models as temperatures would be so far outside human experience.

Notes: As colours move from yellow to red, they indicate increasing severity of impacts. This table shows illustrative impacts at different degrees of warming. Some of the uncertainty is captured in the ranges shown, but there will be additional uncertainties about the exact sise of impacts (more detail in Box 3.2). Temperatures represent increases relative to pre-industrial levels. At each temperature, the impacts are expressed for a 1°C band around the central temperature, e.g. 1°C represents the range 0.5 – 1.5°C etc. Numbers of people affected at different temperatures assume population and GDP scenarios for the 2080s from the Intergovernmental Panel on Climate Change (IPCC). Figures generally assume adaptation at the level of an individual or firm, but not economy-wide adaptations due to policy intervention (covered in Part V). Source: Stern Review, Chapter 3.


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