The economic valuation of droughts: the 2003 event in the Po basin - In the summer 2002, an exceptional drought has occurred in the Po basin, normally characterized by very abundant available resources, that have encouraged a very intensive use of water resources. In order to recover an acceptable flow, the Basin Authority has obliged upstream hydropower plants to release higher quantities and also reduced the allowed abstractions for irrigation. This study analyzes the economic impact of the event on irrigation and energy sectors; alternative scenarios are then examined, in which water is allocated to the most productive uses. The resulting total cost is significantly lower.
Keywords: Water scarcity, drought management, irrigation, hydropower
Jel Code: Q15, Q25