The likely magnitude and breadth of climate change impactsthrough water resources on multiple sectors of the economy suggeststhat these efforts could reap significant dividends, in terms of newknowledge about the economic impacts of climate change. The scopeof this paper excludes two important issues covered by other papersin this issue: (1) agricultural adaptation, through changes in irrigationand other mechanisms; and (2) adaptation to changes in the distribution(frequency and severity) of extreme events like drought andflood. However, the world is increasingly urban; about one-half of theglobal population resides in cities, and virtually all expected populationgrowth in the next three decades is expected to occur in developingcountry cities (Cohen, 2006). Providing sufficient water supply forhuman consumption, sanitation and wastewater treatment is a criticalchallenge that has not yet been met for current populations, and theseneeds will only increase in future decades (WHO/UNICEF, 2010).12These pressures, and the potential they hold to shape the evolution ofwater resource management institutions, in combination with changesin hydrological regimes due to climate change, suggest that therewouldbe significant potential benefits to incorporating water supply anddemand adaptation modeling into IAMs.
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