Integration of a Network-Based and an Economy-Wide Water Model to Support Decision Making on Water Resources Planning and Management in Northeastern Brazil

Abstract

Allocation of Water Resources at the basin level is a critical issue for economic growth as well as for environmental sustainability. This study integrates network-based optimization with an Input-Output model, made available through a Spatial Decision Support System (HEAL), to support design and evaluation of water allocation policies. The innovative platform was applied to a case study using four-interlinked hydrographic basins in Northeastern of Brazil. The integrated modeling was able to measure broader socioeconomic impacts of decisions on reservoir volumes and water allocations at basin level, through indicators in a sectoral and regional scale, including ones associated with Sustainable Development Goals, such as the Water Use Efficiency (WUE) indicator. Results of the trade-offs between two scenarios, representative of the limits of performance of regulatory water instruments, were generated using the integrated modeling. They were compared with the Reference scenario for the base year (2011) and show that the economic sector most negatively affected by the regulatory instrument use is the industrial sector. Furthermore, the sugar and ethanol industry, main water users in the industrial sector (93.1% of the sector's water use) and less efficient (WUE 1.47 US$/m3 vs. 30.70 US$/m3 average of the sector) in the base year, maintain their percentage share of water use in the sector and even slightly expand it (93.2%), with slight efficiency gains (+2.3%). On the other hand, non-water-intensive industries, have their shares reduced (from 6.9 to 6.8%) and lose efficiency (−9.5%). Results of the same trade-offs by region showed that the largest proportional economic losses occur in the drier areas, damaging the economy, especially in the most industrialized municipalities with the highest GDPs. Integrated economic modeling can expand aspects involved in water security issues, assisting management by introducing socioeconomic impact measures, in a broader scale, associated with allocation decisions. Hydrological allocation criteria cannot distinguish between user efficiency and which economic sectors are using how much water. This results in economic and social losses. In water-scarce regions and with growing transfer needs, such as in the basins studied, adequate incentives, through management instruments designed based on economic theory, are essential to promote sustainable development.

Review of Decision Support Systems and Allocation Models for Integrated Water Resources Management Focusing on Joint Water Quantity-Quality

“…Thus, the total economy-wide impact of different water allocation decisions can be measured. These results can produce indicators to support the implementation of river basin sustainable development goals (RiSDGs), as proposed by Ge et al (2018) and obtained recently (Alcoforado de Moraes et al 2021). This latter integrated modeling, as it is available through an SDSS (the HEAL System), should allow the development of new optimization models using other criteria, such as the economic one, whose results will be automatically associated with direct and indirect socioeconomic impacts.…”

“…Points under the curve, on the other hand, can improve both objectives. Even though these solutions on the Pareto front are nondominated, there are trade-offs among them (Alcoforado de Moraes et al 2021). This gives policy makers the opportunity to select optimal solutions according to policy priorities.…”

“…The implementation of effective and sustainable IWRM needs a planning and decision process which includes the participation of all the stakeholders involved, and requires support from models and DSSs that are able to promote negotiation and cooperation (Basco-Carrera et al 2017). There are few SDSS models providing an integration of economy results (Alcoforado de Moraes et al 2021;Bekchanov and Lamers 2016;Chakroun et al 2015;Mysiak et al 2005; Souza da Silva and Alcoforado de Moraes 2021; Wang et al 2019), and these are mainly prescriptive ones. More than ever, this is an important research study area in the field of IWRM, as these tools can provide common framework for modelers, decision makers, and stakeholders.…”

Trade and Climate Mitigation Interactions Create Agro‐Economic Opportunities With Social and Environmental Trade‐Offs in Latin America and the Caribbean

“…However, only a few WERs (e.g., Colorado, #58) have particularly large increases in water withdrawals, highlighting where targeted investments in water infrastructure could help capitalize on opportunities and reduce water scarcity pressures. Most WERs are already pursuing multiple objectives, including water supply, land development and management, and climate mitigation measures (Alcoforado de Moraes et al., 2021; COIRCO, 2014). Our study provides additional context to understand how their goals might be affected by global‐scale drivers, so that they can better align their priorities if desired.…”