An Economic Drought Management Index to Evaluate Water Institutions' Performance Under Uncertainty and Climate Change

Abstract:     
This paper proposes a new Economic Drought Management Index (EDMI) that could assist water managers to inter-temporally manage water reservoirs. The index's main appeal is that it can be easily interpreted and that it encompasses in a single number hydrological processes, structural constraints, water institutions' rules and the economic benefits of the customers served by the supply system. An empirical application of EDMIs is performed for two irrigation districts in Andalusia (Southern Spain), that are managed under different institutional arrangements. EDMIs are then re-evaluated and estimated for various scenarios of climate change, and for a 8-year real period, which includes three consecutive drought years. Results show that the region's vulnerability to drought could be reduced following the interpretation of the EDMIs. EDMIs under climate change scenarios suggest that the water stocks management criteria should be vastly reformed. Lastly, EDMIs evaluated for the actual period of 1990-98 indicated that the severe drought suffered by the region could have been partially avoided, or at least delayed, if water managers had followed the recommendations that are warranted by the EDMIs evaluated for those years.

Keywords: Water Resources, irrigation, stocks management, climate change

JEL Classifications: Q1, Q2

Working Paper Series