The Global Water Footprint of Distortionary Agricultural Policy | Tamma Carleton
Tamma Carleton is an Assistant Professor of Economics at the Bren School of Environmental Science & Management at UC Santa Barbara.
She will be presenting her paper ‘The global water footprint of distortionary agricultural policy’
Abstract: Global demands on freshwater resources are rising. While policy responses have focused on the design of local water institutions, distortions in the global market for agricultural goods can lead to overproduction of water-intensive goods in regions where water is relatively scarce. In this paper, I combine satellite-derived measures of water availability with a collection of spatial and administrative datasets to provide globally-comprehensive, empirical estimates of the influence of policy distortions in agricultural markets on local water supplies. I find that interventions raising domestic agricultural output prices significantly lower local water availability, particularly for water-intensive crops and in locations most suitable for those crops. I then quantify the impact that recent liberalization of agricultural markets has had on water resources. I find that in locations with declining water resources, water supplies would have been 16% lower had liberalization not taken place. In contrast, liberalization slightly reduced accumulation in locations otherwise gaining water. These findings highlight that recent removals of agricultural market distortions have alleviated global water stress by reducing extraction where water levels are declining most rapidly.
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