Economic impacts of climate change on water resources and agriculture in Zayandehroud river basin in Iran

Abstract

Climate change has drastic impacts on water resources and agricultural productivity, especially in arid and semi-arid environments. The present study simulated and explored the economic impacts of climate change on the water and agriculture sectors of the Zayandehroud river basin in Iran for the years 2040 and 2070in three major phases. In phase I, two general circulation models (GCM) (HadCM2 and CGCM3T63), an artificial neural network (ANN) rainfall-runoff model, and crop-water production functions were applied to evaluate the biophysical impacts of climate change on water resources and various crop yields. In Phase II, the aforementioned models were integrated into the hydro-economic spatial equilibrium model of Zayandehroud basin (HE-SEMZ), and the effects of the modeled runoff and socio-economics changes on the economic welfare of the water sector, its distributional consequences, and on temporal-spatial water prices and allocation were simulated. In Phase III, the simulated optimal allocated water to the agriculture sector was introduced into a positive mathematical programming (PMP) model of the agriculture sector to simulate follow-on changes in crop acreage, cropping patterns, and farmers’ gross benefit. In this modeling framework, the role of two no-cost adaptation strategies in agriculture, i.e. modifications in crop irrigation and cropping pattern, were also investigated. The results showed that by mid-century, precipitation will be reduced and temperature increased in the Zayandehroud river basin. The direct result of these changes will be a reduction in the basin discharge by 4.3 % in 2040 and 8.1 % in 2070 compared to the base period. The simulated economic value of water showed upward trends under climate change and socio-economic scenarios, reflecting an increase in water scarcity. In response to changes in the scarcity value of water, users respond by changing their patterns of water use and allocation. The withdrawal by each sector decreases in response to reduced runoff, although agriculture will be more responsive. The results of the PMP model showed that by choosing optimal cropping pattern and an optimum deficient-irrigation strategy for each crop, there will be good opportunities for farmers to adapt to increasing water scarcity and higher temperatures induced by climate change.