Welfare Evaluation and the Economic Impacts of Climate Change on Water Supply and Demand in Chile, Colombia, and Bolivia

While countries in Latin America have a relatively plentiful supply of water on a per-capita basis and high coverage of water supply services, there is ample evidence that water scarcity is affecting the daily lives of millions. Due in part to expectations that water should be completely free and provided by public authorities, water issues have galvanized civil society and the media into demanding government action that will guarantee access to potable water and sanitation services, reduce the pollution of rivers, and protect people and economic activities from devastating floods (Abel Mejia 2010). In a context of positive economic growth, demand for water is expected to increase, which compounds current competition issues. Competition is especially fierce between the urban/industrial sector and the agricultural sector. In addition to this, the predictions of the 2007 Inter-Governmental Panel on Climate Change (IPCC) regarding changes in precipitation patterns have been confirmed in recent years, with some areas receiving more rainfall (southern Brazil, Paraguay, Uruguay, northeast Argentina and northwest Peru), and others receiving less (southern Chile, southwest Argentina, southern Peru and Mesoamerica) (De La Torre et al 2009).

This research will aim to study from an interdisciplinary perspective the economic and social impact of changes in water availability and quality due to climate change, and its relationship with population growth, land-use change, and carbon sequestration, as well as other social and environmental stressors affecting the welfare and quality of life of people in Chile, Colombia and Bolivia.

In line with the Bernoux et al (2011) concept, this proposal understands carbon sequestration as an integral part of watershed management strategies to address climate change issues, as it regards watershed protection as a major factor in managing climate change risks. This study will: i. analyze how the combination of factors such as climate change, population growth, economic activities and land-use change affects water availability, water quality and carbon sequestration, ii: evaluate the economic and social welfare impacts of changes in water availability and quality in the context of climate change, iii. develop a replicable methodology for welfare analysis of climate change impacts; and iv. develop a management instrument that will allow policy makers to evaluate the impact of these policies by means of practical indicators.

Recipient institution:
Universidad de Concepción
Facultad de Ciencas Económicas y Administrativas
Victoria 471
Concepción, Chile

Project ID


Project status


End Date

Friday, May 20, 2016


36 months

IDRC Officer

Walter Ubal

Total funding

CA$ 478,000


Bolivia, Chile, Colombia


Climate Change

Project Leader

Felipe Vasquez


Universidad del Desarrollo

Institution Country


Institution Website