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Econometric model to predict the effect that various water resource management scenarios would have on South Africa’s economic development
Expanded Title:This study has been able to construct a macroeconometric model that is suitable for obtaining the main goals set out in the ToR, viz.: • The ability to demonstrate the importance of water in the South African economy. • The ability to provide the means of quantifying the impact on the South African economy of different water policy strategies and demand/supply scenarios. • The ability to forecast the demand for water on both a national and a regional level in line with the overall expected socio-economic developments. The project team has been able to operationalise a so-called IM modelling approach that is linked in an inter-active way to a Water Satellite Model that incorporates a regional component. This SAFRIM/WSM model now makes it possible to make water demand and supply forecasts on a regional level that coincide with the officially demarcated Water Management Areas The SAFRIM/WSM framework devised and made operational through this project is not proposed as being a perfect solution, however, it does go a long way towards achieving the initial goals set out in the TOR of this study. The international literature survey has demonstrated that the best model for any use is that model which has the characteristics that are strongest in the areas that are most important to the analysis being undertaken. The authors of this study believe that the SAFRIM/WSM modelling system easily fulfils the minimum requirements as prescribed by the South African situation at the moment. In the process it has demonstrated its capability to assist the agents responsible for implementing the NWRS (1998) in achieving the following objectives: • The introduction of effective water conservation and demand management policies (WC/WDM). • Formulating and over-arching water pricing strategy in line with marginal cost/benefit ratios. • The possibility of re-allocating water between lower and higher economic uses. • Closely monitoring the impact of macro economic policies in the areas of taxation, monetary policy, international trade, redistribution of income, etc on sectoral and overall water demand. The process of model building forces analysts to come to grips with the complexities of the subject at hand, in this case, the role of water in the South African economy. By using the macroeconometric model developed in this study quantitative measurements of the importance of water in the South African economy has been measured through the use of sectoral multipliers and with scenario settings.
Date Published:01/06/2012
Document Type:Research Report
Document Subjects:Water Resource Management/IWRM - Planning and development, Agricultural Water - Small holder irrigation
Document Format:Report
Document File Type:pdf
Research Report Type:Standard
WRC Report No:1570/1/12
ISBN No:978-1-4312-0255-3
Project No:K5/1570
Originator:WRC
Organizations:Conningarth Economists
Document Size:399 KB
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