Exploring the economic impacts of adapting abstraction policies in response to climate change and variability: application for Small Island Developing States

Abstract

Vulnerability to climate change, water scarcity, and food security in tropical Small Island Developing Sate (SIDS) are attracting increased attention. Water scarcity induced by climate change and variability could have serious consequences for economic development and food security and has led to calls for more efficient and sustainable adaptation measures. This research details the investigation of the economic impacts associated with adapting groundwater abstraction policies to address the sustainability of meeting competing needs for groundwater. An integrated optimization framework is developed that contains climate scenarios, land use, agronomy, groundwater, economic performance and an abstraction adaptation strategy with a numerical example of a tropical island. The findings indicate increased adverse economic impacts of climate change (being just a shift in the long-run average condition) on water availability, food security, and urban livelihoods as compared to those impacts associated with climate variability alone. Variability in precipitation associated with climate variability (no change in the climate baseline) tends to alleviate the negative impact of the climate change. Those economic impacts, however, are found to have an unequal distribution across the different competing sectors. Food producers and household users would bear the adverse consequences of climate change and variability. This is especially the case when an adaptation policy based on maintaining water sustainability is imposed. The framework provides a holistic tool for exploring the effectiveness of groundwater adaptation strategies and possible policy responses to climate change and variability.