Valuing the Impact of Trade on Local Blue Water

Abstract

Economic values of water for the main Public Irrigation Schemes in the sub-middle region of the São Francisco River Basin, in northeastern Brazil, are determined in this study using an integration of a global agro-economic land and water use (MAgPIE) with a local economic model (Positive Mathematical Programming). As in the latter, the water values depend on the crops grown, and as Brazilian agriculture is strongly influenced by the global market, we used a regionalized version of the global model adapted to the region in order to simulate the crop land use, which is in turn determined by changes in global demand, trade barriers, and climate. The allocation of sugarcane and fruit crops projected with climate change by the global model, showed an impact on the average yields and on the water costs in the main schemes resulting in changes in the water values locally. The economic values for all schemes in the baseline year were higher than the water prices established for agricultural use in the basin. In the future, these water values will be higher in all the schemes. The highest water values currently and in the future were identified in municipalities with a significant proportion of area growing irrigated sugarcane. Being aware of current water values of each user in a baseline year and in a projected future under global climate and socioeconomic changes, decision makers should improve water allocation policies at local scale, in order to avoid conflicts and unsustainable development in the future.

Notes

1. Municipality is the lowest level of administrative aggregation in Brazil and this is one of the spatial resolution used in Brazilian Agricultural Census (IBGE 2006)

2. The GCMs include MPI ECHAM5, MIUB ECHO-G, and UKMO HADCM3.

3. The projections for 2035 by MAgPIE for irrigated corn production ceases almost totally under A2 scenario.

5. The average variable cost of water (see Table 1)

6. All the tables in Online Resource 1 presenting monetary values are also in Brazilian Reais (R$) for the same index year (2006).

7. A Leontief coefficient (see Table 1)

8. The total land costs in Petrolina constitute 42% and the total supply (capital) costs are 32% of the total production costs in the future.

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Funding

The first and the third author are sponsored by CNPQ—Conselho Nacional de Desenvolvimento Científico e Tecnológico—and CT-HIDRO, Brazilian government agency and fund. The PhD student is sponsored by CNPQ and all the authors are participants of the Innovate project, which was funded by the German Federal Ministry of Education and Research (BMBF) and CNPq/CAPES—Coordenação de Aperfeiçoamento do Pessoal de Ensino Superior (Brazil).

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Authors and Affiliations

1. Department of Economics and Graduate Program at Federal University of Pernambuco, Av. dos Economistas, s/n. Cidade Universitária, Recife, PE, 50740590, Brazil

   Márcia Maria Guedes Alcoforado de Moraes

2. Potsdam Institute for Climate Impact Research–PIK, P.O.Box.601 203, 14412, Potsdam, Germany

   Anne Biewald, Alexander Popp & Hermann Lotze-Campen

3. Federal University of Pernambuco, Recife, PE, Brazil

   Ana Cristina Guimarães Carneiro

4. Graduate Program in Civil Engineering, Federal University of Pernambuco, Recife, PE, Brazil

   Gerald Norbert Souza da Silva

5. Humboldt-Universtität zu Berlin, 10099, Berlin, Germany

   Hermann Lotze-Campen

Corresponding author

Correspondence to Márcia Maria Guedes Alcoforado de Moraes.

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Alcoforado de Moraes, M.M.G., Biewald, A., Carneiro, A.C.G. et al. The impact of global change on economic values of water for Public Irrigation Schemes at the São Francisco River Basin in Brazil. Reg Environ Change 18, 1943–1955 (2018). https://doi.org/10.1007/s10113-018-1291-0

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• Received: 31 October 2016

• Accepted: 23 January 2018

• Published: 19 February 2018

• Issue Date: October 2018

• DOI : https://doi.org/10.1007/s10113-018-1291-0

Keywords

• Economic value of water
• Water pricing
• São Francisco River Basin
• Semi-arid region
• Positive mathematical programming
• Global model

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Source: https://link.springer.com/article/10.1007/s10113-018-1291-0

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