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Water Supply and Demand

Water Supply and Demand. Bangkok 2013. Water Supply. Measuring Supply. Water is expensive to move from watershed to watershed Heavy so costly to move Low valued (except for drinking water) Correct measure of supply is at watershed level- not country level Monthly pattern also matters

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Water Supply and Demand

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  1. Water Supply and Demand Bangkok 2013

  2. Water Supply

  3. Measuring Supply • Water is expensive to move from watershed to watershed • Heavy so costly to move • Low valued (except for drinking water) • Correct measure of supply is at watershed level- not country level • Monthly pattern also matters • Expensive to store across months • Requires a dam

  4. Measuring Water Supply • Care about fresh water (not saltwater) • Care about supply relative to land and people • Not every country the same • Some have abundant water • Some have very little • Some have scarce water/land but abundant water/person

  5. Water Supply

  6. Measuring Demand • Four primary users • Agriculture- largest user • Industry- second largest • Residential- highest valued

  7. Water Demand

  8. Water Allocation • Suppose two users: farmers and U&I • U&I more price inelastic than farmer • Suppose that farmers have more water than efficient amount • What is loss?

  9. Initial Allocation U & I Supply Price Inefficiency Farmer Water for farmers Water for Urban/Industry

  10. Climate Change • Suppose that climate change reduces water supply • Suppose farmer water is protected • Water must come from U&I • Efficiency loss grows

  11. U&I Supply Price Farmer Water for farmers Water for Urban/Industry

  12. Climate Change • Suppose that climate change reduces water supply • Suppose water is reallocated from farmers to U&I • Efficiency losses shrink • Water management objective- equate marginal value of water across users

  13. U&I Supply Price Farmer Water for farmers Water for Urban/Industry

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