Study on the assessment of socio-economic potential losses due to water shortages

The recent arrival of the climate crisis has led to a shortage of water for living, industry, and agriculture due to drought. This occurrence has an economic impact on various social sectors, and if it continues for a long period of time, it leads to a decrease in socio-economic activities. Consequently, the socio-economic impact of water shortages has emerged as a pivotal research area. By identifying the socio-economic potential losses due to water use in various industries, we can develop strategies for an effective water distribution system.In light of intensifying climate change, the frequency and intensity of droughts are projected to rise. These droughts are expected to have negative socio-economic impacts in the order of weather, agriculture, life, and industry.In this study, we aim to develop an evaluation technique for socio-economic potential losses due to water shortages in South Korea.Based on the evaluation technique, we intend to assess how much socio-economic potential loss is caused by water shortages in the areas of living, industry, and agriculture. The selected evaluation method is the WIOLP analysis technique of the industry-related analysis, and the analysis was conducted for the years 2015 and 2018, when drought damage occurred in the Republic of Korea. In 2015, it was estimated that a 10% reduction in water usage due to drought would result in damages amounting to approximately 257.9 billion won. A 90% reduction, on the other hand, was predicted to lead to widespread industry-wide damage. In 2018, if the water usage is reduced by 10% due to drought, the estimated loss is projected to be around 318.9 billion won. If usage is reduced by more than 80%, damage is likely to occur across all industries, initially affecting some sectors. The results of this study are expected to contribute to the evaluation of socio-economic potential losses due to water shortages and the assessment of water usage in each sector.

Acknowledgments: This work was supported by Korea Environment Industry & Technology Institute (KEITI) through Water Management Program for Drought Project, funded by Korea Ministry of Environment (MOE). (RS-2023-00230286).