Developing a methodological framework for estimating water productivity indicators in water scarce regions

Water productivity is an area of growing interest in assessing the impact of human economic activities on water resources, especially in arid regions. Indicators of water productivity can assist water users in evaluating sectoral water use efficiency, identifying sources of pressure on water resources, and in supporting water allocation rationale under scarcity conditions. This case study for the water-scarce Middle Rio Grande River Basin aims to develop an environmental-economic accounting approach for water use in arid river basins through a methodological framework that relates water use to human economic activities impacting regional water resources. Water uses are coupled to economic transactions, and the complex but mutual relations between various water using sectors estimated. A comparison is made between the calculated water productivity indicators and representative cost/price per unit volume of water for the main water use sectors. Although it contributes very little to regional economic output, preliminary results confirm that Irrigation is among the sectors with the largest direct water use intensities. High economic value and low water use intensity economic sectors in the study region include Manufacturing, Mining, and Steam Electric Power. Water accounting challenges revealed by the study include differences in water management regimes between jurisdictions, and little understanding of the impact of major economic activities on the interaction between surface and groundwater systems in this region. A more comprehensive assessment would require the incorporation of environmental and social sustainability indicators to the calculated water productivity indicators.