Assessment of the impacts of water transfers to urban-industrial sectors on irrigation outcomes in the Indus Basin

Y. C. Ethan Yang1, Ghazi Alam2 & Claudia Ringler3

1/U of Massachusetts, 2/Cornell U./NESPAK, 3/ IFPRI

Urban-industrial water use Urban-industrial water use in Pakistan is

currently almost entirely met by groundwater (GW) sources

Given the rapid increase in urban-industrial water demand in recent years and projected out into the future, there is a high risk that GW tables in major cities might become saline, requiring rural-to-urban water transfers

This paper assesses the implications on agricultural production

Modeling- Data used (1) This study modified the Indus River Basin

Model Revised (IBMR) to evaluate the effect of transferring irrigated water to domestic and industrial (D&I) water use

The IBMR in its most recent revision is significantly different, from its original version that was developed in the 1970s, having undergone several revisions over the past three decades.

Modeling- Data used (1) Utilizing Non-linear programming

techniques and advancements in computing power, the IBMR in its current form gives a fairly accurate description of the Indus Basin Agricultural and Hydrologic System.

D&I water uses in nine major cities located in Pakistan are considered in the modeling framework

Utility function of D&I water uses are derived from water demand curve (based on historical water demand-price relationship) for both domestic and industrial water

Modeling- Data used (1) Surface water is assumed to be diverted

from the closest irrigated canal Groundwater is assumed to be unlimited

Canals Cities 02-CBD Lahore 04-UC Gujranwala 11-JHA Faisalabad 17-SID Multan 22-USW Rawalpindi

Islamabad 25-KAB Peshawar 39-ROH Hyderabad 42-KAL Karachi

Modeling- Data used (1)

Major Industry group

Water demand (MAF)

Textile 1.103 Chemical 0.167 Paper 0.085 Food 0.078

Group PAKISTAN PUNJAB SINDH NWFP BALOCHISTAN

ISLAMABAD

Textile 1328 764 447 74 42 1 Chemical 493 213 167 69 28 16 Paper 133 71 29 27 4 2 Food 1861 1122 556 118 36 29

Water demand (Sutton 2009)

Industrial production (CMI 2005-06 survey)

Indus Basin Model (Revised)--Structure

Domestic-Industrial water transfers

Two different scenarios: S 1: No cap for groundwater pumping but

pumping cost will increase with groundwater depth

S 2: Cap total groundwater pumping at 50 MAF (safe yield for the system) and pumping cost will increase with groundwater depth Note: The Safe Yield may be adjusted to any

figure in the IBMR, it is the entirely the modeler’s choice.

Dom&Ind transfers—water diversions (S1)

Optimized combinations of GW and SW resources

Surface water Groundwater

Dom&Ind transfers—decline in water table (ft) (S1)

Change in depth to water table: Punjab most affected

Slight reduction from dom&ind competition, decline in benefit from increasing pumping cost as GW tables continue to decline

Dom&Ind water transfers—crop profit (S1)

-0.4

-0.3

-0.2

-0.1

0

0.1

0.2

0.3

Dom&Ind water transfers—change in crop profits (S1) (in percent)

GW pumping increases by 7%. Crop production decline by 0.01%.

Larger decline in total and crop benefits when GW is limited.

Dom&Ind water transfers—crop profit (S2)

In drought years, industrial production declines due to water scarcity.

Dom&Ind water transfers—total benefits (S2

Dom&Ind water transfers—change in crop profits (S2) (in percent)

GW pumping decline by 14%. Crop production decline by 5.2%.

-20

-15

-10

-5

0

5

10

15

Impacts of D&I transfer on provincial irrigation profits

Crop benefit change (%)

Scenario 1

Scenario 2

Punjab -0.94 -1.82

Sindh -0.29 -0.74

Others* 4.86 8.24

*Others shows benefits, but production is low.

Conclusions

Using only surface water for D&I uses is insufficient when Water Accord is enforced (results not shown)

When groundwater is unlimited, the impact on crop profits is small, but the water table (especially in Punjab) would drop dramatically

If total groundwater pumping is capped at safe yield, crop profit will decrease 5.2%

In very dry years, industrial output is affected by water scarcity

Conclusions

Major crop productions such as: basmati and irrigated rice, wheat and sugarcane will suffer larger impacts

Groundwater tables will continue to decline (and will do so even more with continued population increase)

D&I transfers reduce crop profits particularly in Punjab, followed by Sindh, while other provinces show slight improvements

Policy recommendations

GW tables likely to continually decline, salinization will increase and urban GW sources are threatened

Rural-to-urban water transfers common in many water-scarce countries and likely to occur in Pakistan as well

Food production impacts depend on the specific canals from which water is transferred to urban/industrial areas can study alternatives

Policy recommendations

Impacts on rural incomes will depend on how and if farmers are compensated for the rural-to-urban water transfers

Irrigation sustainability will depend on irrigation service providers being able to charge urban/industrial consumers

Given scarce/fragile GW resources in parts of Pakistan, important to more efficiently use SW resources (additional ongoing research with the Punjab Irrigation Department)