POTENTIAL ECONOMIC IMPACTS OF CHANGES IN WATER AVAILABILITY ON AGRICULTURE IN THE TRUCKEE AND CARSON RWER BASINS, NEVADA, USA.

Effects of climate change are likely to be detected in nearly all sectors and regions of the economy, with both winners and losers. One of the consequences of climatic changes could be altered regional water supplies. This paper presents an investigation of regional agricultural implications of changes in water availability. Specifically, using a profit maximization approach, the economic consequences of altered water availability in the Great Basin of Nevada are analyzed in terms of the effects on net returns of agricultural producers. Under the scenarios analyzed in this paper, it is found that with adequate water systems, increase in streamflow and consequent increase in water availability could significantly benefit agricultural producers of this region. Net returns to irrigators could increase by 8 to 13 percent, not taking into account the possibility of changes in crop yields and prices. It is also shown that the benefits from increased water availability are sensitive to likely crop yield and price changes. The potential for adverse effects of climatic changes on water supply is also considered by analyzing the effects of decreased water availability. Under decreased water availability scenarios, farmer net returns decrease substantially. [ABSTRACT FROM AUTHOR]