Economic policy of the effect of global warming on available water resources: The case of Turkey-Germany

The aim of this study is to evaluate the impact of global warming on water resources in terms of quantity and to evaluate its possible effects on the macro economy and its possible future effects. This evaluation was made at the national scales of Turkey and Germany samples and at the scale of one basin subsample within the sample countries. For this purpose, starting from 1990, an econometric analysis was created by using the data series in the closest range to the present. In order to provide consistency within itself, each of the data series was collected from a single source. For this purpose, data from the US National Aeronautics and Space Administration for the annual change in global temperature variation anomalies, the European Environment Agency for national and basin scale fresh water withdrawals, and the World Bank for macroeconomic variables were used. In the analysis, a causality test was conducted between the data sets of global warming, water withdrawals of sample countries and basins and macroeconomic variables of sample countries by using the Vector Autoregression (VAR) model. After causality tests based on the VAR model, global warming, water withdrawals of sample countries and basins, and macroeconomic variables of sample countries were subjected to future predictions by using the same data sets using the Exponential Soft Transition Autoregressive (ESTAR) model. In the causality test based on the VAR model, it was concluded that there is no causal link between global warming and Turkey's national sectoral water withdrawals and the total water withdrawal at the sample basin scale. In the causality test conducted for the example of Germany, a causal link was determined only between the agricultural sector and global warming among the sectoral water withdrawals made on a national scale. No causal link was found between the total water withdrawal from the sample basin selected from Germany and global warming. On the other hand, it has been concluded that there are various causality links at different levels between the macroeconomic variables of the sample countries and the sectoral water withdrawals at the national level. One of the results obtained in the second stage of the econometric analysis carried out with the help of the ESTAR model is that the rate of increase in the global warming prediction in the medium-term future will decrease and remain in balance at approximately 0.76°C. This result is compatible with the scenario coded RCP2.6 of the Intergovernmental Panel on Climate Change. Estimates of water withdrawal and macroeconomic variables differ according to sample countries and sectors. It has been concluded that Turkey's resources will come under greater stress with the increase of water withdrawal in the future. Despite this result, the usable water availability of Turkey and the sample basin seems to be sufficient for economic growth in the medium-term future. In the light of the analysis based on the ESTAR model, although the aforementioned water stress for the example of Germany has increased in general, it has been seen that Germany's usable water resources, both at the national and basin scale, can easily support the economic activity of Germany in the near and medium term future.