Climate change adaptation and water resource management: A review of the literature

S. M. Olmstead

Energy Economics (November 2014)

DOI: 10.1016/j.eneco.2013.09.005

Abstract This paper considers the extent and usefulness of the existing empirical literature on water supply, demand, and adaptation to climate change for incorporation into integrated assessment modeling efforts. We review the existing literature on the likely economic impacts of climate change, acting through water supply and demand effects in specific river basins, and the ability of adaptation to mitigate those impacts. Since adaptive responses will be implemented largely by local, regional, and national water management institutions, we also review what is known about the responses of water users to water prices, non-price water conservation policies, water trading, investment in and operations of storage and conveyance infrastructure, and transboundary water allocation mechanisms — the set of policy levers typically available to water managers at various geographic scales. Remaining gaps in the empirical economic literature on these topics are identified. The paper also describes the potential contributions of linking existing and new empirical research on water resource adaptation with IAMs. The importance of further empirical economic and political–economic research on the role of water management institutions in adaptation, or maladaptation, to climate change emerges as an important theme.

keywords: Adaptation; Climate; Water

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