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This paper aims at developing a simulation framework to jointly assess agricultural and water issues. While the strong linkages between water, food, and the environment call for an integrated and multidisciplinary modelling approach, a complete and consistent modelling system to evaluate food-water relationships in Europe was missing so far. The spatial economic simulation model for agriculture CAPRI, which comprises a set of environmental indicators to assess food-environment interrelations within European regions, has been extended to account for food-water links. This modelling framework enables simulating the potential impact of climate change and water availability on agricultural production at the EU regional level, as well as looking at the sustainable use of water, the implementation of water policies or the integration of water issues in the Common Agricultural Policy

Although numerous modelling efforts have integrated food and water considerations at the farm or river basin level, very few agro-economic models are able to jointly assess water and food policies at the global level. The present report explores the feasibility of integrating water considerations into the CAPRI model. First, a literature review of modelling approaches integrating food and water issues has been conducted. Three agro-economic models, IMPACT, WATERSIM and GLOBIOM, have been analysed in detail. In addition, biophysical and hydrological models estimating agricultural water use have also been studied, in particular the global hydrological model WATERGAP and the LISFLOOD model. Thanks to the programming approach of its supply module, CAPRI shows a high potentiality to integrate environmental indicators as well as to enter new resource constraints (land potentially irrigated, irrigation water) and input-output relationships. At least in theory, the activity-based approach of the regional programming model in CAPRI allows differentiating between rainfed and irrigated activities. The suggested approach to include water into the CAPRI model involves creating an irrigation module and a water use module. The development of the CAPRI water module will enable to provide scientific assessment on agricultural water use within the EU and to analyze agricultural pressures on water resources. The feasibility of the approach has been tested in a pilot case study including two NUTS 2 regions (Andalucia in Spain and Midi-Pyrenees in France). Preliminary results are presented, highlighting the interrelations between water and agricultural developments in Europe. As a next step, it is foreseen to further develop the CAPRI water module to account for competition between agricultural and non-agricultural water use. This will imply building a water use sub-module to compute water use balances.

According to the European Council's recent agreement on domestic climate and energy goals, greenhouse gas emissions from sectors outside the EU's Emission Trading Scheme have to be cut by 30% below 2005 levels by 2030. So far no decision has been taken on agriculture's specific involvement in mitigation obligations or on how mitigation targets would be distributed between Member States. Based on hypothetical assumptions, we employ the CAPRI model to illustrate and highlight some potential impacts and challenges related to an integration of the agricultural sector into the new EU climate policy framework. Results of the hypothetical mitigation policy scenario show important impacts on EU agriculture, in particular the livestock sector, if the distribution key of the current Effort Sharing Decision would be rigidly applied as in our assumptions. The results highlight the importance of a targeted but flexible implementation of mitigation policy instruments in the EU and its Member States, as well as the need for a wider consideration and adoption of technological mitigation options.