The objective of this research is to develop an integrated economic and environmental model which combines a spatial model of hydrological ecosystem services and a computable general equilibrium model to better inform policy and decision-making. In order to evaluate economic and environmental policies, a CGE model will be integrated with the spatially explicit watershed eco-hydrology model. The research will focus on the impacts of two ecosystem services (provision water and regulation of water flow) on regional economy. TR32 (Aydin, Denizli, Mugla) region, which is located on the south-west coast of Turkey has been identified as the research site based on the assessment of available data, socio-economic complexity and richness of biodiversity. TR32 has a population around 2.8 million. TR32 region’s water is provided by two basins (Buyuk Menderes and Batik Akdeniz basins with 24,976 km2 and 20,953km2 catchment areas). The research will enable decision makers to quantitatively estimate the effects of various policy options of managing water towers of Turkey, both in the study area and in other parts of Turkey where poverty is much higher than the national average and where locals depend on ecosystem services for their livelihoods.
The research fills a gap in the literature with respect to water CGE modelling by integrating it with a GIS-based ecohydrology model. This research will add the following new insights: better understanding of the dynamic effects of the spatial distribution of the hydrological ecosystem services on regional economy; and incorporation of fundamentals of ecohydrological interactions between terrestrial and aquatic ecosystems into macroeconomic general equilibrium.