Abstract: A socio-hydrological model is used to forecast future conditions in a river basin arising from changes in climate and the economy in order to learn about macroeconomic conditions that would yield pathways for sustainable development and how they may be affected by changes in climate and the economy. The study uses a system dynamics model with endogenous social values and preferences and exogenous climate and economic drivers. Basin scale sustainability is defined as a function of economic growth, provision of environmental services and equality within the basin. The analysis reveals that a diversified basin economy is important to achieve sustainable development. Under current climate conditions, a higher level of diversification in the basin's economy increases sustainability. Higher current capital growth rates, e.g., >2% of the current rate, would also lead to more sustainable development of a kind that is less affected by the availability of water and robust to vagaries of climate change. The results suggest that policy-makers and resource managers should focus on measures to diversify the economy when it is thriving, but also consider the capacity of society to adapt to unpredictable shocks to the system.
Read the full article in Ecological Economics.