Abstract for:Assessing Adaptation Options for Water-Constrained Economy with System Dynamics Hydroeconomic Model

Within the Interdisciplinary Knowledge Integration (IKI) approach, a family of system dynamics (SD) hydroeconomic models is developed to simulate the dynamics of water-constrained economies under precipitation changes caused by anthropogenic climate change. In the present paper, we describe one of the members of the model family – a regional SD economic model linked to a lumped watershed hydrological model. The model is calibrated for Júcar River Basin, Spain, and allows assessing regional adaptation options (represented in the modelling framework as investment flow facilitating long-term increase of efficiency of water use for adaptation to droughts). The model is driven by EURO-CORDEX precipitation projections, including projections generated by the regional climate model REMO. ‘Business-as-Usual’ scenario (with no investment in adaptation to droughts), as well as scenarios with different investments in adaptation, are assessed within the SD framework. The important finding provided by the hydroeconomic model is the “affordability of adaptation” (under assumptions adopted). The increase of efficiency of water use can offset in mid-term the water shortage caused by precipitation decline, and the efficient adaptation policy is possible with only a relatively small share of regional investment channeled into climate adaptation infrastructure improvement.