For next lecture: Reading: Kahn, Ch 16 Jenkins, Kopits and Simpson, 2009

1. For next lecture:Reading: Kahn, Ch 16Jenkins, Kopits and Simpson, 2009 Lecture 24 December 1, 2011 Climate Change and Growth Their Impact on Water Resources

2. A. What do we know about likely impacts on water? • Higher temperatures and faster evaporation • Drought periods and flooding events more likely • Less groundwater recharge (big storms) • Less glaciers storage of water (melting glaciers) • Thus greater uncertainty concerning water supplies • Growth in population and income mean increases in water demand (Figure 1)

3. Figure 1

4. B. What problems does this raise • This raises growing concerns about water security for domestic uses, food production, energy production and environmental protection. • Major water investments needed ranging from flood protection to stabilizing urban water supplies. • Need to reallocate water to its higher valued uses and encourage water conservation become critical. • Can’t rely on historic water data for planning, management and investment because historic patterns are being altered by climate change.

5. C. Water requirement to obtain more energy • For cooling • Water used per unit of energy Nuclear power 3,140 liters/mwh* Coal 2,840 liters/mwh Natural gas 2,270 liters/mwh Geothermal 6,410 liters/mwh Solar thermal 2,000 liters/mwh Biomass 2,070 liters/mwh Solar photovoletic no water • Of total U.S. water withdraws 48% is for cooling (200 billion gallons per day)** * megawatt hour ** 2% is consumptive use

6. C. Water requirement …continued 2. For extraction of natural gas from new sources • Coal bed Methane: pumping groundwater to release methane gas • Shale held natural gas: water plus chemicals forced underground to extract the natural gas • In 2009 it provided 14% of U.S.’s natural gas, but by 2035 it is projected to be 46% of U.S. natural gas

7. C. Water requirement …continued 3. Oil from shale Green River Formation about 800 billion barrels of recoverable oil (western U.S.)* • Three barrels of water are needed per barrel of shale oil produced • This puts stress on upper Colorado River basin where shale oil is located. (172.6 million m3 of water required annually by 2040) • This competes directly with agriculture and environmental services • To what extent do they consider water when they make their oil investment? *Over three times the Saudi Arabian oil resources.

8. C. Water requirement …continued 4. Water for biofuels • 15 liters of water per liter of ethanol. U.S. may need 542.5 million m3 of water annually by 2022*. • Biodiesel and cellulosic ethanol also will use large amounts of water * U.S. Target for biofuels is 20% of transport energy by 2022.

9. C. Water requirement …continued 5. Tar sands use is uncertain in U.S. but extraction in western Canada has contaminated large quantities of water. • Hot water is used to wash the oil from the sand • Canada has between 300 and 600 billion barrels of oil in tar sands and oil production is increasing from 2 to 3 million barrels/day* • About 25% of U.S. oil imports come from Canada • Keystone XL pipeline from Canada to Texas (Trans Canada wants to build) - might pollute groundwater reserves in Nebraska *A 50% increase

10. C. Water requirement …continued 6. Hydropower – changes the quantity and timing of water flows. • Can cause summer water shortages by storing water to produce electricity in winter • Kyrgyzstan vs. Uzbekistan (upstream vs. downstream or hydropower vs. irrigation) • In Chile non-consumptive water rights of owners of hydropower dams trump consumptive water rights of downstream irrigators. • South Asia big push to build hydropower dams - 60 to 80 big dams in next two to three decades

11. C. Water requirement …continued • Agriculture • One kilo of beef 15,500 liters of water • One kilo of pork 4,800 liters of water • One kilo of chicken 3,900 liters of water • One kilo of rice 3,300 liters of water • One kilo of sorghum 2,800 liters of water • One kilo of soybeans 1,800 liters of water • One kilo of wheat 1,300 liters of water • One kilo of milk 1,000 liters of water • One kilo of maize 900 liters of water • One kilo of potato 900 liters of water

12. D. Impacts of climate change on agriculture • Likely to be mixed effects on crop yields

13. D. Impacts … on agriculture continued 2. Some relocation of production and crops grown • Cropping shifts away from drought prone areas • A number of rice producing areas will shift to other crops • Rise in uncertainty in yields and prices with some potentially large price increases • FAO reported that the food price index hit a historic high of 231 in Jan 2011.* * Index was started in 1990

14. D. Impacts … on agriculture continued 4. Larger impacts from future droughts and floods • Prairie provinces in Canada lost $4.5 billion in GDP due to 2001-2 drought • The Mississippi River flood this year was the second largest in history • Red River of the North in 2011 set a record number of days above flood stage • Current droughts in eastern Africa, Texas and NW China • Without trade some countries will face future food shortages • Some countries will still face food shortages and famine from droughts because of poor transportation and storage facilities as well as politics and warfare

15. E. Where do we get additional water for domestic and environmental uses? • Irrigation is big consumptive water user (almost 70% worldwide): can we reallocate to other uses?  • Increase storage for surface water? • Facilitate groundwater recharge by protecting recharge areas and harvesting rainwater. • Replace once - through cooling systems which account for 91% of cooling withdraws in U.S. • Develop effective demand management practices • Economic incentives can reduce climate change adaption costs, in Western Europe, by $5 billion annually between 2010-50. • Will the Endangered Species Act impact water use for agriculture and energy as climate change and growth alter water demands? • Will certain sources of water no longer be available for commercial use?

16. F. How might we respond with water policies? • Must produce more with existing water resources • Have to improve efficiency in water use particularly for irrigation • Get serious about water pricing and water markets • Encourage water saving technology: drip and sprinkler irrigation • In Tamil Nadu, India drip irrigation increased water productivity by 50% to 200%* • Yet much of the water saved was used to irrigate more land • Develop crop varieties that are drought resistant and use less water • Adopt more perennial crops that have deeper root systems • Invest in and improve improved water infrastructure and management • In Pakistan about 60% of its irrigation water is lost through seepage and evaporation because of poor management * Banana, grapes and coconut

17. F. …Water policies continued 2. Markets can help in reallocating water and also improve efficiency • Australia, Chile, US west, South Africa and Spain have used water markets • Options markets • For drought management in cities  • Used in California • Water as an economic good (irrigation and commercial uses) • Should water for domestic use be considered a basic right? Big issue in Egypt and Northern Mexico. 3. In most countries the consumer isn’t charged enough to cover the cost of providing water • Should companies such as 3M receive subsidized water?

18. F. …Water Policies continued 4. Need to change water institutions including water laws for ownership of groundwater and surface water, for water markets and pricing to be effective (Figure 2) • Need to reduce or eliminate open access particularly for groundwater • Establish enforceable water or water-use rights to make it possible to trade water. • Key is enforceable rules for water pricing and markets that are accepted as “fair”.

19. Figure 2. Levels of Institutional Analysis (developed from Williamson, 2000)

20. F. …Water Policies continued 5. Alternative pricing mechanism to improve water use efficiency and pay for irrigation a. Area-based charges for large scale irrigation (surface water) • Varied by hectare and crop or season or irrigation technology • Varied by time (hours) water is received

21. F. …Water policies continued b. Volumetric pricing for irrigation • Fixed charge per m3 or time pumped (water or time metered) • Two-part charge with a fixed charge plus volumetric charge: resolves potential conflict between full cost recovery and efficient pricing -- Pay fixed charge to cover fixed costs. -- Also helps if there are big year to year variations in water demands.

22. F. …Water policies continued c. Volumetric charges for domestic and industrial water • Block charge: can vary charges by quantity delivered • Volumetric block charges can be increasing, decreasing or constant. • Which charge encourages conservation? • First block charge can be set low so it is affordable by low income families. Higher price for second block to cover costs. (increasing block) (Figure 3) • Two block pricing provides you three tools to affect use

24. F. …Water policies continued 6. Where can we implement volumetric changes? • We have the technology to closely meter water use • Spain and China use meters controlled by bank cards • Farmer have to pay before they can pump water • In India the marginal cost of pumping with electricity is zero (political problem) • Farmer alter meters for electricity • Also it is good politics not to charge farmers for electricity • For volumetric water pricing to work • Invest in meters • Develop an effective method of enforcing metering and payment of water charges

25. F. …Water policies continued • These changes are likely to fall short and new irrigation will have to be developed particularly in sub-Saharan Africa • Currently has very little reservoir storage capacity • May need to expand irrigated area by 20 to 25% • South Asia is also planning many new reservoirs

26. G.A default strategy has been to ration water • Some large cities in India deliver water only for a few hours per day (2 to 5 hours) • Many U.S. cities during droughts ban activities such as car washing and lawn watering • For irrigation it creates a scarcity value for water • This has created informal water markets in some countries • Can also cause serious drops in production • In the commercial sector it has caused some firms to recycle their water and others to develop their own water sources. • The latter can cause rapid declines in groundwater (Bangkok)

27. H. Conclusion • Uncertainty regarding water supply will increase • Our increased energy use will require even more water which will compete with other water uses • With more frequent droughts we must make more efficient use of our water particularly for irrigation and in the energy sector • We will have a difficult time meeting the growing demands for environmental water uses 5. More areas will face water storages resulting in food shortages and price increases

28. H. Conclusion continued 6. Because of increased scarcity the value of water will rise like oil. • Current price of oil $90 to 100/barrel • Current bottle water price $30 to 300/barrel • Pressure will build to construct additional water storage capacity for irrigation, flood control, and urban supplies • We need to be serious about demand management and water prices closer to scarcity values

29. H. Conclusion continued 9. We also need to modernize our water infrastructure and management 10. Desalination will help in a few coastal urban settings. However, energy requirements will be high • 3 to 16 kwh to obtain 1,000 liters of desalinized water • Plus the double strength brine that must be disposed of is equal to the amount of freshwater produced 11. In the final analysis we are adjusting water use and management including supply and infrastructure to adapt to climate change and population and income growth