8. Managing Water Scarcity and Droughts: The Po Experience

34% of the value added created in Italy comes from the Po river basin, and 29% of the Italian industrial and services firms are located there. In addition, there are several sectoral specialisations, such as mechanics, textile and clothing, and food (Musolino et al. 2018a).

Clearly, the literature on the theoretical and methodological approach to the evaluation of the economic impacts of droughts is extremely wide (see, for a literature review, Logan and van den Bergh 2013). There are other approaches and studies that highlight differences in terms of socio-economic impact of drought (Griffin 1998; Ding et al. 2011; Berritella et al. 2007). Mysiak et al. (2013) for example analysed such differences in the Po river basin at the sub-regional scale (agrarian districts, which encompass a bunch of municipalities with similar geographical and hydrological features) and for different crop specializations. However, we decided to use this theoretical approach, the consumer’s surplus theory, as it is the only that specifically cast light on the distributional effects of droughts. Moreover, our analyses were the first which applied this approach to the evaluation of drought impacts on the agricultural sector (the consumer’s surplus theory was applied to other sectors sensitive to droughts, like urban water supply, by Woo 1994; Garcia-Valinas 2006; Grafton and Ward 2008; Martin-Ortega and Markandya 2009).

Pérez-Blanco et al. (2018) provide additional elements to explain the economic losses suffered by this region because of drought events. The application of their model points out that the reduction in agricultural production due to drought causes an excess of demand that propels the production of substitute goods elsewhere in Italy. Therefore, implicitly, they reduce the magnitude of the price effect in this region.

This means that the following events that occurred in the Po basin – in 2005–2007, 2012 and 2015 – were managed out of any plan.

See the website of the Osservatorio Permanente: https://​adbpo.​gov.​it/​osservatorio-permanente/​

The latest document produced within the planning process is the Valutazione Globale Provvisoria (VGP) (Autorità di bacino distrettuale del fiume Po 2019), which provides for the basis and the framework for the next upgrade of the Po Water Balance Plan. See: https://​adbpo.​gov.​it/​partecipazione-pubblica/​

Invented and defined by Claudia Vezzani, it is a kind of “Drought-Hydrometer”, “a shared visualisation tool of the impacts of low flow periods on river discharge, developed for the entire basin. It consists of a thematic map of a whole river in which, at every reference cross-section, the major impacts are represented versus discharge value, in order to make the effects of water management (effects of upstream withdrawals or release, etc.) clear to all the upstream and downstream users” (Musolino et al. 2018a, p. 209).