Vulnerability of the Indian Economy to Water Scarcity: The Role of Food, Forests and Electricity

Acknowledging the critical dependence of food and energy on water, with the increasing demands of growing population, the Indian economy may face critical challenges due to rising water scarcity. Due to interconnected nature... [ view full abstract ]

Acknowledging the critical dependence of food and energy on water, with the increasing demands of growing population, the Indian economy may face critical challenges due to rising water scarcity. Due to interconnected nature of supply chains, risks to operational functioning of economic sectors from indirect water dependence can be as potent as the vulnerability associated with direct supply.

To highlight the importance of renewable and non-renewable water, this research utilizes a water-extended input output model (Bogra et al, 2016) to elucidate vulnerability associated with critical sectors that have either large direct water withdrawal or have an extensive indirect contribution towards other sectors of the Indian economy. Using direct and total contribution in physical terms, metrics are estimated to measure both direct and total vulnerability for each sector of the economy. Using these metrics along with information about maximum direct water withdrawals, the criticality for food sectors from production perspective and industries dependent on the indirect water from consumption perspective is highlighted. Additionally, using application of  network theory in the form of adjacency matrix, it is elucidated that  Electricity sector contributes most towards the economy in terms of surface water availability whereas produce from Forest sector are dependent on renewable water (rainfall). Thus, water used in these sectors make their downstream supply chains most vulnerable to disruptions in the context of Indian economy.

Furthermore, using the technique of structural path analysis, contributing paths are outlined for these 2 sectors to comprehensively map the supply chain vulnerabilities. Also, physical contribution is transformed into total monetary production at risk for these 2 sectors to highlight both green (rainfall) and blue (surface & ground) water vulnerability. Additionally, to capture the regional profile of rising scarcity of water in India, scarce surface-water associated with Electricity and ground water scarcity with regional forest cover is determined to elucidate regional risks. These results could assist policy planning for energy-infrastructure and forest-land planning while accounting for water at the core of such decision making. Additionally, other stake-holders can gain critical insights about both direct and indirect risks to their respective supply chains.

References:

• Shelly Bogra, Bhavik R. Bakshi, and Ritu Mathur. A Water-Withdrawal Input-Output Model of the Indian Economy. Environ. Sci. & Technol., 50 (3):1313{1321, 2016.
• Xiaowen Lin and Qian Dang and Megan Konar. A network analysis of food flows within the United States of America. Environ. Sci. & Technol., 48(10):5439 - 5447, 2014
• Manfred Lenzen. Structural path analysis of ecosystem networks. Ecological Modelling, 200 (3):334-342, 2006.