Exploring the energy-water-food-climate nexus for the Indian Economy in 2030

Abstract:

The economy of India is expected to face serious environmental challenges over the coming decades. Population growth, coupled with economic growth of nearly 7%/year to 2030 will translate into strong growth in energy demands – particularly electricity. The electricity sector’s claim on total available water could grow from 4% to more than 10% in India in 2030, if the use of wet cooling technologies persists (IGES 2013). Water-saving, dry cooling technologies are available for coal-fired power plants, but this requires significant investment and must be done at the time of construction. Growing water demands from electricity generation, when coupled with industrial, residential and commercial demands, are projected to result in water shortages for irrigation in some key river basins such as Indus, Ganges, Subernarekha, Krishna, and Chotanagpui (Rosegrant et al., 2013). The resulting pressure on agricultural production is likely to be exacerbated by climate change, which itself may increase demands for irrigation as an adaptation strategy to higher temperatures and more variable rainfall (AgMIP, 2013).

In this paper we examine the impact of water scarcity on economic growth, food, and energy security in India using an enhanced version of the GTAP-AEZ-WATER model. We find that investments in water-saving technology in the electricity sector are less costly than developing new water supply. However, even when these technologies are implemented, we project shortfalls in water available for irrigated agriculture. These shortfalls result in the contraction of irrigated area and diminished food production relative to the unconstrained baseline. However, trade could help India to mitigate a portion of this pressure by importing more food products from water abundant regions. In addition, allowing for the trading of water within river basins helps to alleviate some of the consequences of water scarcity.