A multiregional input–output optimization model to assess impacts of water supply disruptions under climate change on the Great Lakes economy

Abstract

This paper presents a water-restricted multi-regional input–output model to evaluate the economic impacts of water supply reductions in the Canadian Great Lakes Basin (GLB), one of the largest freshwater reservoirs in the world. The proposed model, first of its kind applied to the GLB, aims to minimize the impact of water supply disruptions on the GLB-economy, measured by the loss of GDP. A new flexible economic optimization procedure is introduced, capable of imposing resource constraints and ensuring minimal supply levels for intermediate and final consumption at the same time. The model accounts for inter-regional trade between different lake regions. The impacts of two climate change scenarios on water security and the economy are investigated, with and without additional food and energy security restrictions. The proposed economic optimization model holds promise as a new tool for resource-restricted Input–Output analyses.

KEYWORDS:

• Input–output model
• nonlinear optimization
• water scarcity
• Great Lakes

Acknowledgements

We are grateful to Rute Pinto in the department of Earth and Environmental Sciences at the University of Waterloo for her help with the development of the spatial disaggregation procedure for the economic data. We are also grateful to the two anonymous reviewers for their insightful suggestions, which helped to improve the quality of the manuscript.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 A reduction of monthly industrial water intake by half to reduce the WAI from 0.4 to 0.2 gives a change in $W^{\text{raw}}$ as follows: $\mathrm{\Delta }{W}^{\text{raw}}=\left(1/2\right)\left(1/12\right)W^{\text{raw}}\approx 0.04W^{\text{raw}}$.

Additional information

Funding

This work was financially supported by the project Global Water Futures as part of the Canada First Research Excellence Fund (CFREF), in particular the sub-projects Integrated Modelling Program for Canada (IMPC) and Lake Futures.