CLIMATE CHANGE, FLOODS, AND DROUGHTS

Among the many global challenges affecting water resources from both supply and demand sides, climate change occupies a principal position. It is estimated that human activities have already caused a 1.0°C increase in global temperature levels as compared to preindustrial levels, with a confidence interval between 0.8°C and 1.2°C. After 2030 and before 2052, global warming is likely to reach a 1.5°C increase unless decisive action is taken by governments worldwide (IPCC 2018). Rising temperatures will affect precipitation patterns, although there is significant uncertainty involved (IPCC 2014): with high confidence, the mean precipitation over mid-latitudinal land areas in the Northern Hemisphere has increased since 1951; elsewhere, long-term increases and decreases mean precipitation trends are of low confidence. For heavy precipitation events, IPCC (2014) found a larger number of areas with more increases than decreases in the frequency and intensity of the events, which suggest a “global- scale intensification of heavy precipitation” (medium confidence) (IPCC 2018). Regarding droughts, there is low confidence regarding global-scale trends, though robust regional trends are observed in the Mediterranean and West Africa (drought increases) and central North America and northwest Australia (drought decreases) (IPCC 2014). In the Mediterranean area, recent literature suggests that drought likelihood has substantially increased and that the (already growing) drought trends available are worsening and should be revised (medium confidence).

At 1.5°C and 2°C increase in global warming, projected changes in regional precipitation show “robust differences in mean precipitation compared to the preindustrial period,” with reductions expected in the Mediterranean area, the Arabian,

Peninsula and Egypt and increasing mean precipitation trends in high latitudes (IPCC 2018). Regarding heavy precipitation, experts also observe robust changes at both 1.5°C and 2°C as compared to preindustrial levels. In Europe for instance, there is agreement in the existence of a positive change in heavy precipitation at 1.5°C. Projections of changes in drought and dryness are uncertain in many regions, although the Mediterranean, US Southwest, and southern African regions display consistent dryness and growing drought trends in most assessments.

Climate change can exacerbate or offset water availability and water security problems worldwide, which appear, nonetheless, to be dominated by population and socioeconomic trends. Economic losses from flooding since 1951 have increased mainly because of greater exposure and vulnerability (high confidence), and impacts of drought have mostly increased because of growing demand (IPCC 2014). At 1.5°C and 2°C increase in global warming, risks associated with runoff (e.g., landslides) will increase globally, and flood hazards will also increase in certain regions, although socioeconomic conditions will become a more relevant factor in explaining socioeconomic losses (Alfieri et al. 2017). However, assuming constant populations, countries representing 73% of the world’s population would still face an increasing flood risk of between 100% (1.5°C) and 170% (2°C). Under “constant socio-economic conditions,” the population exposed to extreme drought at 1.5°C in 2021-2040 is expected to be 114.3 million, and 190.4 million at 2°C in 2041-2060.

Response to droughts used to be “reactive,” managing a water crisis by measures after a drought event takes place. During the last two decades, there has been an increasing shift toward a “proactive” approach. The proactive or preventive approach that can be considered an approach to “risk management” consists of measures to be prepared in a planned manner in case of drought. The first drought management plans were promoted in the Mediterranean region, where we can find several guides for the preparation of such plans (Iglesias et al. 2007; Spanish Ministry of Environment 2005). An example of a result of these initiatives, the drought management plans of Spain arose in 2007 as part of the River Basin Management Plans (Estrela and Vargas 2012), which served as an example for other plans, such as those of Turkey or the United States.

Finally, regarding flood risk management, there is growing literature on this issue and several models for predicting floods have been developed in recent years, as well as methods to evaluate different technical and nontechnical measures to manage flood risks. These methods include planting vegetation to retain extra water, terracing hillsides to arrest downhill flow, and the construction of floodways (man-made channels to divert floodwater). Other techniques include the construction of levees, dikes, dams, reservoirs, or retention ponds to hold extra water during times of flooding (International Water Association [IWA] 2016).

WATER MANAGEMENT INSTRUMENTS FOR THE FUTURE

Demand pressures, supply constraints, and consequences of climate change all act to increase competition for scarce water resources and make the (re)allocation of water resources a rising issue in the policy agenda (Damania et al. 2017). Water- resource deallocation refers to the distribution of the resource across space and time and among users (OECD 2015a). Policy makers have several instruments at their disposal to encourage an efficient allocation system that represents society’s preferences and to ensure this system is robust and resilient and thus capable of tolerating and recovering from perturbations. Traditionally, such instruments have been based on engineering, that is, focused on the construction and exploitation of waterworks to meet water demand and harness the potential of water for economic growth. From aqueducts, reservoirs, and traditional irrigation systems, waterworks have escalated to interbasin water transfers, major dams, modern irrigation devices, wastewater treatment plants, and desalination plants, among others (Hassan 2010). Yet, as water demand continues to rise, water economies are progressively reaching a maturity phase in which incremental provisioning costs result in an inelastic supply schedule, and the financial and environmental costs of developing new waterworks have begun to exceed the economic benefits in the least productive (marginal) uses of existing supplies (Randall 1981). At this point, the focus needs to shift from meeting demand needs to reallocate available resources so that the societal goals of efficiency, robustness, and resiliency are met. From an IRWM perspective, this is addressed through the combination of supply and demand policies that “maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability of vital ecosystems” (UN 2012). Demand-side policies typically involve regulatory instruments (command and control) that specify a particular type of behavior agents have to comply with but also include economic instruments that replace the traditional notions of control and government-led planning by those of incentives, motivation, and multilevel governance. This section surveys supply- and demand-side instruments for water resources management and explores their pros and cons, including issues of socioeconomic context, policy mix, and sequencing, so to assess their contribution to sustainable, robust, and resilient economic growth.

Waterworks

John Locke and Francis Bacon famously stated that “nature is only subdued by submission.” Throughout human history, water policies worldwide have reproduced this view. Following a nomadic period where hunters and gatherers depended on the wild plants and animals sustained by rainfall (which varied significantly from one place to another but, on the whole, was insufficient to provide food for large, dense, settled populations), families began settling near springs, lakes, and rivers to supply livestock and crops with water, gradually developing technologies to divert water for irrigation and domestic purposes. Many civilizations, from Babylonian to Chinese, Mayan, or Roman, constructed water delivery systems such as aqueducts to carry water to cities (Hassan 2010; Yevjevich 1992). These and other settled societies thereafter have addressed water quality and quantity issues through capital-intensive waterworks that made increasing amounts of water available to users. These include reservoirs, canals, wells, water transfers, irrigation schemes and, more recently, desalination and wastewater treatment plants. Recent paradigmatic examples of this trend can be found in the arid and semi-arid areas of the Mediterranean basin, southern Australia, Chile, and the western states of the United States, where economic growth has been closely linked to the capacity of public institutions to make increasing amounts of water available to users. In this context, the main objective of water policy consisted of finding inexpensive and reliable means to meet water demand through a coordinated public effort to supply the water services demanded as a result of advances in the many areas of the economy, including population growth, urban sprawl, expanding manufacturing activities, and irrigation development.

However, this technical success in harnessing the potential of water for economic growth has come with a number of problems. Failure to acknowledge nature’s limits and the finiteness of water resources has led to unrealistic expectations of the ability of water bodies to meet growing needs from human systems, which in turn have resulted in increasing demand and water-resource overallocation. Slowly but steadily the law of diminishing returns, which states that increasing the amount of a single factor of production (in this case, water) leads to a decrease in the marginal incremental output of the production process, has eroded marginal returns of water projects. A good example to illustrate this trend can be found in hydropower in Spain, where the installed capacity has increased by 145% from 1928 to 2012, but the average hydropower production (in GWh) throughout the period remained at similar levels to those of 1928. Although admittedly this policy increased the robustness and resilience of the system, its financial costs are considerably larger than these benefits, and the cost-to-benefit ratio worsens when we include environmental costs (Exposito 2018; Gomez 2009). Supply-side policies represent a cornerstone in the development of human societies. However, the water crisis we are facing cannot be tackled solely with waterworks; demand instruments are necessary to define priorities and reallocate available resources so that societal goals are met (Quiggin 2001).