Recent times have been volatile in Pakistan’s Indus Basin. In 2009, a weak summer monsoon created drought IndusThe Basin of Pakistan conditions throughout the country, exacerbating an already tenuous situation for many rural households faced with high fuel and fertilizer costs and the impacts of rising global food prices. Then catastrophic monsoon flooding in 2010 affected more than 20 million people, laying devastation to their housing, infrastructure, and crops. Damages from this single flood event were estimated at US$10 billion, half of which were losses in the agriculture sector alone. It is timely, if not critical, to focus on climate risks for water, agriculture, and food security in this region. Public Disclosure Authorized The Indus Basin of Pakistan: The Impacts of Climate Risks on Water and Agriculture presents a greatly needed investigation into the extent to which the country is resilient to such shocks. The authors use several different modeling environments—among the best mathematical representations available—to describe the physical and economic responses to future exogenous climate risks, including hydrologic models, an agro-economic optimization model of the irrigation system, and a computable general-equilibrium model of Pakistan’s economy. The integrated systems framework used in this study provides a broad and unique approach to estimating the hydrologic and crop impacts of climate change risks, the macro-economic and household- level responses, and an effective method for assessing a variety of adaptation investments and policies. A better understanding of how the climate, water, and agriculture sectors are linked will help decision makers plan for future investments. The authors integrate the insights of multiple disciplines to benefit the assessment of future climate impacts in this region. The assessment approach developed in this volume will Yu, Yang, Savitsky, Alford, Brown, Wescoat, Debowicz, and Robinson Debowicz, Wescoat, Brown, Alford, Savitsky, Yang, Yu, Public Disclosure Authorized help to sharpen critical policies and interventions by the Pakistan government, especially, and will be a resource to professionals and students of water and agricultural sector management everywhere. DIRECTIONS IN DEVELOPMENT Countries and Regions The Indus Basin of Pakistan Public Disclosure Authorized The Impacts of Climate Risks on Water and Agriculture Winston Yu, Yi-Chen Yang, Andre Savitsky, Donald Alford, Casey Brown, James Wescoat, Dario Debowicz, and Sherman Robinson THE WORLD BANK ISBN 978-0-8213-9874-6 Public Disclosure Authorized SKU 19874 The Indus Basin of Pakistan DIRECTIONS IN DEVELOPMENT Countries and Regions The Indus Basin of Pakistan The Impacts of Climate Risks on Water and Agriculture Winston Yu, Yi-Chen Yang, Andre Savitsky, Donald Alford, Casey Brown, James Wescoat, Dario Debowicz, and Sherman Robinson © 2013 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved 1 2 3 4 16 15 14 13 This work is a product of the staff of The World Bank with external contributions. 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License: Creative Commons Attribution CC BY 3.0 Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an official World Bank translation. The World Bank shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. ISBN (paper): 978-0-8213-9874-6 ISBN (electronic): 978-0-8213-9875-3 DOI: 10.1596/978-0-8213-9874-6 Cover photo: Donald Alford; Cover design: Naylor Design. Library of Congress Cataloging-in-Publication Data Yu, Winston H. The Indus Basin of Pakistan : the impacts of climate risks on water and agriculture / Winston Yu, Yi-Chen Yang, Andre Savitsky, Donald Alford, Casey Brown, James Wescoat, Dario Debowicz, and Sherman Robinson. p. cm. Includes bibliographical references. ISBN 978-0-8213-9874-6 — ISBN 978-0-8213-9875-3 (electronic) 1. Climatic changes—Pakistan. 2. Crops and climate—Pakistan 3. Water resources development— Environmental aspects—Pakistan. 4. Indus River Watershed—Economic conditions. 5. Indus River Watershed—Environmental conditions. I. World Bank. II. Title. QC903.2.P18Y82 2013 551.48095491—dc23 2013008111 The Indus Basin of Pakistan • http://dx.doi.org/10.1596/978-0-8213-9874-6 Contents Acknowledgments xiii About the Authors xv Abbreviations xvii Executive Summary 1 Study Objective 2 Policies and Plans 3 Upper Indus Basin Hydrology and Glaciers 4 Future Climate Scenarios 6 Modeling Water, Climate, Food, and the Economy 7 Climate Risk Scenarios 8 Adaptation Investment Scenarios 10 Conclusions 14 Note 14 References 15 Chapter 1 Two Years in the Life of the Indus River Basin 17 Background and Problem Statement 17 Difficult Years for the Indus Basin: 2009–11 23 Study Approach: A Framework for Integrated Water and Agriculture Assessment 29 Note 31 References 31 Chapter 2 The Current Water and Agriculture Context, Challenges, and Policies 35 Key Messages 35 Limited Water Storage 36 Problematic Trends in Surface Water and Groundwater Usage 37 Inflexible and Uncertain Water Allocation Institutions 42 Low Water-Use Efficiencies and Productivity 46 National Policies and Plans on Water and Agriculture 47 Notes 52 References 53 The Indus Basin of Pakistan • http://dx.doi.org/10.1596/978-0-8213-9874-6 v vi Contents Chapter 3 Hydrology and Glaciers in the Upper Indus Basin 57 Key Messages 57 The Indus River 58 Hydrology of the Upper Indus Basin 61 Glacier Climates of the Upper Indus Basin 63 Distributed Process Models of Glaciers and Total Basin Runoff 65 Climate and Stream Flow Variability in the Upper Indus Basin 72 Note 75 References 75 Chapter 4 Future Climate Scenarios for the Indus Basin 77 Key Messages 77 Overview of Historical Patterns and Trends 78 Future Climate Change Risks 86 Future Climate in the Indus Basin Irrigation System 86 Future Climate in the Upper Indus Basin 90 Notes 91 References 92 Chapter 5 Modeling Water, Climate, Agriculture, and the Economy 95 Section 1: Indus Basin Model Revised (IBMR-2012) 95 Economic Objective 95 Water Balance 97 Input Data, Equations, Constraints, and Output Data 99 Baseline: Year 2008/09 106 Section 2: Computable General Equilibrium Model 108 CGE Model Structure 108 Social Accounting Matrix for Pakistan 114 Integration of the Two Models 116 Model Limitations 116 Notes 117 References 117 Chapter 6 Sensitivity and Scenario Results 119 Key Messages 119 Sensitivities of Hydrologic Parameters and the DIVACRD Constraint 120 Future Climate Risk Scenarios 123 Adaptation Investment Scenario Analyses 130 Environmental Issues 137 References 142 The Indus Basin of Pakistan • http://dx.doi.org/10.1596/978-0-8213-9874-6 Contents vii Chapter 7 The Way Forward 145 Key Messages 146 Final Thoughts 148 Appendix A Structure of IBMR 151 Description of 12 Agro-Climatic Zones 151 Appendix B IBMR Updating to IBMR 2008 155 Model Structure Change: The Lateral Groundwater Flow in IBMR 155 Model Structure Change: The Refined Sugar and Sugar Cane Issue 156 Model Structure Change: Removed Variables and Equations in IBMR 2008 156 Data Updating 157 IBMR Model Diagnosis 157 References 162 Appendix C Details of the Pakistan Social Accounting Matrix (SAM) 163 Figures ES.1 Contributions of Snowmelt and Ice Melt to Total Runoff for Sub-Basins in the Upper Indus Basin 5 ES.2 CGE and IBMR Economic Outcomes under Climate Risk Scenarios 9 ES.3 Different Household Income Changes under Climate Risk Scenarios 9 ES.4 Crop Production Changes under Climate Risk Scenarios 10 ES.5 Cumulative Distribution