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energy tends to have a higher price elasticity, making pricing a more cogent management instrument for this domain, as illustrated by the tariff differential between peak and off-peak consumption in certain countries. This implies that water tariff increases are likely to be more effective at raising revenues than in limiting demand. 1.4 Interconnections Interconnections between water, energy and other sectors means that policies that benefit one domain can translate to increased risks and detrimental effects in another; yet they can help generate co-benefits as well. The 2011/2012 European Report on Development summarized it this way: A drop of water, a piece of land, or a kilojoule of renewable energy cannot be seen through the single lens of one sectoral policy or management system. What might appear to be an efficient policy in one dimension can be harmful for the others, and different ways of exploiting water and land or producing renewable energy place different stresses on the other resources. An adequate response to emerging challenges, and specifically the linkages between water, energy and land, make it imperative to examine and manage the trade-offs not only among users and uses of the same resource, but also of other related resources (EU, 2012, p. 5). The well-documented case of how government-subsidized energy drove the expansion of irrigation in parts of India provides one example of such interconnections. In the western Indus-Ganges basin, a single line provided electrical power to both the irrigation and the domestic sectors, which meant the electricity utility was unable to charge a separate electricity tariff to groundwater irrigators (Box 16.1). Several decades of cheap energy, combined with the construction of millions of private wells, new pump technologies and water-inefficient irrigation practices, led to phenomenal growth in the exploitation of groundwater (World Bank, 2010b). This perverse link between energy subsidy policy and groundwater overdraft has left the state with a bankrupt electricity utility (Shah et al., 2008). By shielding farmers from the full cost of pumping, government electricity subsidies have established a pattern of groundwater use that has proved to be resistant to change. As a result, 29% of the country’s groundwater assessment blocks are classified as semi-critical, critical or over-exploited, with the situation deteriorating rapidly (Garduno et al., 2011; Mukherji et al., 2009). Similar experiences have been documented in Latin America and elsewhere (e.g. Oman and Yemen). With energy subsidies in place that reduce the cost of pumping, once irrigation reaches a certain level of profitability or there are limitations in surface water availability, regulatory measures 1.2 Climate change adaptation and mitigation Climate change adaptation is primarily about water, as stated for example by the Intergovernmental Panel on Climate Change (IPCC), which identifies water as the fundamental link through which climate change will impact humans and the environment (IPCC, 2008). In addition, water is critical for climate change mitigation, as many efforts to reduce carbon emissions such as carbon capture and storage rely on water availability for long-term success. Providing sufficient energy for all while radically reducing greenhouse gas emissions will require a paramount shift towards fossil-free energy use, very high energy efficiency, and equity. These goals may limit the availability of water resources for communities and ecosystems and result in a reduction of adaptive capacity for future change. For example, biofuels need vast quantities of water to grow the biofuel crop and process it into bioenergy, while large hydropower plants need to store vast quantities of water, especially during dry seasons, which could in certain instances hamper irrigated agriculture as an adaptation measure to combat climate-driven drought. In this case adaptation and mitigation measures are competing for water. Another urgent mitigation challenge intimately linked to water is terrestrial carbon sequestration. Water in vegetation, soils and wetlands is the lock that seals carbon reservoirs, for example in peatlands, and provides necessary water for sustaining or restoring carbon storage by forests. Climate change mitigation requires effective adaptation to succeed. The water cycle is sensitive to climate change and water is vital to energy generation and carbon storage. Water can also serve as a bridge to support both adaptation and mitigation. For instance, reforestation can reduce or prevent destructive surface runoff and debris flows from intensifying precipitation events by stabilizing hill slopes and promoting recharge. Strategic decisions should ideally acknowledge the turnover periods of technical systems, such as approximately 40 years for energy systems, in order to recognize the risks for technical lock-in in systems that lack robustness in coping with changes in climatic conditions and demand (IEA, 2012a). Source: Karin Lexén, SIWI. 20 CHAPTER 1 STATUS, TRENDS AND CHALLENGES BOxPDF Image | Water and Energy
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