Water scarcity and climate change in Greece: challenges and opportunities for agriculture in a CGE framework

Abstract

Indeed, why is water scarcity, especially in sensitive areas with a dry climate and limited surface and groundwater, coming as a nightmare scenario of desertification and relocation of economic activities? Initially, the problem of water scarcity was occurring in the agricultural sector of developing countries, however, going through the era when Climate Change is not just a theoretical but a living phenomenon, it is suddenly noticed that it also affects developed countries to a great extent. The regions of southern Europe seem to be facing one of the biggest problems of climate change, water scarcity, in the coming years. In Greece, regions such as Thessaly, Central Macedonia, Attica, and Aegean islands face this major water scarcity challenge. Its plains and rivers are being intensively irrigated despite the already existing problem faced by the agricultural sector due to the dry river basin districts and the low rainfall, making farming difficult and unsustainable. The thesis aims to demonstrate three issues facing Greek agricultural production: 1) what are the economic consequences of water scarcity in the agricultural sector, 2) how crop yields are fully dependent on climatic factors and 3) whether the traditional model of dryland crop production can be changed. The aim of this paper is to fully address these issues in a comprehensive scientific way through the Computable General Equilibrium (CGE) economic models, which provide a method for studying the role of water resources and water scarcity in the agricultural production sector and can yield important results. Finally, based on European examples, policy applications of sustainable and resilient practices are given.