A hybrid partial and general equilibrium modeling approach to assess the hydro-economic impacts of large dams – The case of the Grand Ethiopian Renaissance Dam in the Eastern Nile River basin. (July 2019)

• Record Type: Journal Article
• Authors: Kahsay, Tewodros Negash; Arjoon, Diane; Kuik, Onno; Brouwer, Roy; Tilmant, Amaury; van der Zaag, Pieter
• Is Part Of: Environmental modelling & software. Volume 117(2019)
• Page Start: 76
• Page End: 88
• Publication Date: 2019-07
• Subjects: Computable general equilibrium modeling -- Stochastic dual dynamic programming -- Grand Ethiopian Renaissance dam -- Eastern Nile countries; Environmental monitoring -- Computer programs -- Periodicals; Ecology -- Computer simulation -- Periodicals; Digital computer simulation -- Periodicals; Computer software -- Periodicals; Environmental Monitoring -- Periodicals; Computer Simulation -- Periodicals; Environnement -- Surveillance -- Logiciels -- Périodiques; Écologie -- Simulation, Méthodes de -- Périodiques; Simulation par ordinateur -- Périodiques; Logiciels -- Périodiques; Computer software; Digital computer simulation; Ecology -- Computer simulation; Environmental monitoring -- Computer programs; Periodicals; Electronic journals; 363.70015118
• DOI: 10.1016/j.envsoft.2019.03.007
• Languages: English
• ISSNs: 1364-8152

Abstract

Abstract: A novel integrated hydro-economic modeling framework that links a bottom-up partial equilibrium (engineering) model with a top-down (economic) general equilibrium model is developed for assessing the regional economic impacts of water resources management and infrastructure development decisions in a transboundary river basin. The engineering model is employed first to solve the water allocation problem for a river system in a partial equilibrium setting. The resulting system-wide changes in optimal water allocation are subsequently fed into the general equilibrium model to provide an economy-wide perspective. This integrated hydro-economic modeling framework is illustrated using the Eastern Nile River basin as a case study. The engineering-based stochastic dual dynamic programming (SDDP) model of the Eastern Nile basin is coupled with the computable general equilibrium (CGE) model GTAP-W to assess the economy-wide impacts of the Grand Ethiopian Renaissance Dam (GERD) on the Eastern Nile economies. Highlights: A hybrid hydro-economic modeling approach is developed combining existing models. The value added of the new model is tested on the Grand Ethiopian Renaissance Dam. Optimal water allocation is simulated using a stochastic-dynamic engineering model. Results feed into a macro-economic model for a basin and economy-wide perspective. Integrated modeling increases the credibility of the economy-wide impacts of dams.