IWRM Incorporating Water Use and Productivity Indicators of Economic Clusters Using a Hydro-Economic SDSS

IWRM should include the integration of management instruments towards intersectoral efficient water allocation. A platform linking economywide and network-based models, available from a Spatial Decision Support System (SDSS), was used to analyze allocation decisions in 4-interlinked basins in Northeastern Brazil during a period of water scarcity. The SDSS can integrate water allocation issues considering hydrologic and socioeconomic aspects. In this study, we applied a normalized concentration index and exploratory spatial data analysis to socioeconomic data to identify job hotspots in economic sectors. Hydro-economic indicators were determined and used as economic weights of those hotspots and individual users for water allocation. This innovative method of allocation simulates the use of economic instruments. Removing the weights, the use of non-economic instruments is also simulated. The economic allocation transfers water from agriculture and industry to the services sector compared to the non-economic. This is justified given the low indicators of the main sectors of agriculture and industry in the region: sugarcane cultivation and the sugar-alcohol industry. Moreover, regional transfer results show that without using economic criteria and maintaining the current distribution network, there is a transfer of water stored in drier to humid regions. These results can support the decision-making process by defining effective management instruments.