Evaluating the economic impact of water scarcity in a changing world

This study explores the economic impacts of global water scarcity using a coupled global hydrologic-economic model. The model links climate change, water resources, adaptive capacities, and economic teleconnections to assess the economic surplus (or loss) in major hydrologic basins. Results show that economic impacts can be strongly positive or negative, heavily influenced by market adaptations and global trade. Market adaptation significantly magnifies economic uncertainty compared to hydrologic uncertainty. The study highlights the importance of considering diverse scenario combinations, as impactful scenarios often involve unexpected interactions of factors.

Flannery Dolan, Jonathan Lamontagne, Robert Link, Mohamad Hejazi, Patrick Reed, Jae Edmonds