A Spatially Integrated Hydro-economic Modelling Framework for Water Allocation in Transboundary River Basins: Application to the Saskatchewan River Basin, Canada

Allocating limited available water resources among competing water uses is complicated in large transboundary river basins, where water resources are governed by multiple jurisdictions, and water allocation decisions typically affect a multitude of vested and emerging economic water interests. To support efficient and sustainable allocation of the limited water resources at transboundary scale, a hydro-economic modelling framework is required that integrates the appropriate engineering-based water management modelling approach with a macro-economic modelling framework that accounts for the relevant cross-sectoral and cross-regional interdependencies. Accordingly, the present study proposes a spatially integrated hydro-economic modelling framework consisting of an inter-regional economic supply-side input-output model and a water resources system model developed in the MODSIM-Decision Support System (DSS) platform. This framework allows us to evaluate the direct and indirect economic impacts of climate-change-induced water shortages in various sectors at different scales, namely the provincial, sub-basin, and the entire river basin level. This framework is applied to the transboundary Saskatchewan River Basin in Canada. This river basin encompasses three Canadian provinces: Alberta, Saskatchewan, and Manitoba. Due to extensive developments, upstream Alberta experiences a water over-allocation challenge, while downstream Saskatchewan is planning for new developments based on the unused amount of its entitled water from this river. By stress testing of the integrated model, we assess the sensitivity of different sectors/sub-basins to changes in water supply. Results reveal that the economy of this river basin is most sensitive to the changes in water supply to the “Mining, quarrying, and oil & gas extraction” sector. The results also show that the integrated model accounts for the interconnectedness between sectors and sub-basins. The findings can inform decision making around water supply re-prioritization and re-allocation, based on the economic sensitivities to water shortages.