Socioeconomic Impacts of water allocation instruments Using Hybrid Models in a SDSS: A Scarcity Crisis Case Study at a Sucroenergetic Production Area in Northeast Brazil

Código

I-EBHE0188

Autores

Marcia Maria Guedes Alcoforado de Moraes, Nilena Dias, GERALD NORBERT SOUZA DA SILVA, Marcelo Pereira da Cunha, Joaquim José Martins Guilhoto

Tema

WG 2.6: Water systems analysis for integrated planning & management

Resumo

Water availability uncertainties and increasing demand pressures necessitate shifting the focus from Integrated Water Resources Management to Integrated Water Resources Allocation and Management (IWRAM), particularly in developing countries. These regions face growing demands for agricultural products, urbanization, and water quality deterioration, creating conflicts amidst weak law enforcement and unpredictable water availability. The complexity of these trade-offs makes IWRAM challenging. Technology, economics, and stakeholder engagement are essential for addressing these problems. In Brazil, sustainable water management and allocation are crucial for bioenergy production. The anticipated rise in biofuel demand, driven by climate change mitigation efforts, may adversely affect blue and grey water resources in specific sub-regions, transforming the economic valuation of water, especially in water-scarce regions like Northeast Brazil (NEB). Pernambuco, one of Northeast's driest states, has increased sugarcane irrigation for ethanol production, effectively exporting "blue" water to meet domestic biofuel needs, even to states with greater water availability. Addressing these challenges requires policies that consider the economic value of water scarcity. Effective regulation can incentivize efficient water use, encourage crop mix changes, and promote investment in efficient irrigation technologies. Measuring socioeconomic impacts of different water allocation in critical situations can support policy design. An integrated economic platform was developed through interdisciplinary research projects funded by National Water Agency. Water-economy models were integrated into a Spatial Decision Support System - HEAL System, serving as a water allocation policy evaluation tool for modelers, decision-makers, and stakeholders. Using the SDSS, non-linear optimization models were developed based on a network to represent water distributions among users under various strategies during the 2011-2013 scarcity period in Agreste of Pernambuco, the region with Brazil's worst water balance. These models were linked to an interregional Input-Output Matrix based on a 2011 Brazilian IOM, representing 76 economic sectors in each of 75 regions. This disaggregation allowed for the analysis of water use throughout the production chain. Allocation strategies were examined: maximizing reservoir volumes, maximizing demand fulfillment proportions, and maximizing total GDP. GDP contributions from each demand node were calculated by multiplying individual water use efficiency coefficients by the allocated water simulating the economic instrument, favoring efficient users. Results indicated that raw water transfers from agriculture and industry to services occurred only under the economic criterion. In Agreste, the sugar-energy sector is the largest raw water consumer but has a low GDP/ employment impact. The services sector, primarily water&sewage (WS), uses significant raw water and contributes notably to GDP and employment. During the extreme event (2012-2018), the public supply sector experienced significant reductions due to reservoir collapses, leading to substantial economic losses. The integrated platform simulated regulatory and economic instruments, showing that the latter, resulted in lower socioeconomic losses by transferring water from the sugar-energy to the services sector. These strategies increased direct benefits for the WS and yielded indirect economic benefits for urban industrial and service sectors. To mitigate water issues in Pernambuco and other areas in NEB, particularly with potential bioenergy expansion, it is urgent to design allocation instruments that incentivize efficient water use in critical situations.