The consequences of climate change for water resources depend not only on possible changes in the resource base—as indicated in Section 4.3—but also on changes in the demand, both human and environmental, for that resource. This section assesses the potential effects of climate change on water withdrawals and use, placing these effects in the context of the many nonclimatic influences that are driving demand.

It must be noted that “demand” in its economic sense means willingness to pay for a particular service or commodity and is a function of many variables—particularly price, income (for households), output (for industries or agriculture), family composition, education levels, and so forth. The usefulness of the demand function is found in the ability to predict the effects of changes in causal variables and in measurement of the demanding party’s “willingness to pay” as a measure of gross benefits to the demanding party of various quantities. This willingness to pay is measured as the area under the demand function in the price-quantity plane. The quantities actually purchased (the quantities of water withdrawn or used) over time are the result of the interaction of factors affecting demand as defined above and conditions of supply (or availability). Thus, for example, the fact that the quantity purchased over time increases could be the result of falling costs of supply (a shift in the supply curve) rather than an increase in demand (shift in the demand curve). In this section, the term “demand” often is used as a synonym for “requirements;” this reflects usage of the term in large parts of the water sector.

Demands can be classified along two dimensions: instream or offstream, and consumptive or nonconsumptive. Instream demands use water within the river channel (or lake) and do not involve withdrawal. Examples include ecosystem uses, navigation, hydropower generation, recreation, and use of the water course for waste assimilation. Offstream demands extract water from the river channel, lake, or aquifer. They include domestic, industrial, and agricultural demands, as well as extractions for industrial and power station cooling. These demands can be consumptive or nonconsumptive. Consumptive demands “use” the water so it cannot be entirely returned to the river; nonconsumptive demands return the water to the river, although it may be returned to a different catchment or at a different quality. The primary consumptive demands are for irrigation and some types of industrial cooling (where the water is evaporated to the atmosphere rather than returned to the river).

Table 4-5: Percentage change in average summer water use from 1990 by 2030: Washington, D.C. (Boland, 1997).a
	Policy 1b	Policy 2c	Policy 3d
No change in climate	+100	+61	+45
Additional Change over Baseline Climate
GISS A scenario	+8	+8	+8
GISS B scenario	-13	-13	-13
GFDL scenario	+15	+15	+15
Max Planck scenario	+17	+16	+17
Hadley Centre scenario	+19	+19	+19
a See original paper for scenario definitions. b Policy 1 = 1990 measures. c Policy 2 = Policy 1 plus increased recycling, public education, and altered plumbing regulations. d Policy 3 = Policy 2 plus 50% real increase in water tariffs.

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