The choice of scale for balancing water demand and supply in GCAM: GCAM reconciles water demand and supply at the river basin scale. Water demands are initially computed at either the geopolitical region or agro-ecological zones and disaggregated to the basin scale. A mapping structure is implemented to dynamically allocate water demands from their native spatial units to the river basin scale. The mapping structure establishes the allocation of water demands based on the results of a spatial downscaling algorithm (Hejazi et al. 2014b) that downscales water demands to the grid scale (0.5x0.5 degree spatial resolution) and upscale to the basin scale. This procedure was applied to the base year (2005) and was kept constant for future time periods. Water availability is calculated at the grid scale and then aggregated to the basin scale through the spatial movement of water (i.e., river routing). The choice of the basin size and scale at which water demands and supplies are resolved will have implications for understanding the impact of water use. Allocation of water among the various users at the grid scale is unattainable in this economic framework as it is not possible to fully represent integrated economic decision making for all goods and services at the grid scale. On the other hand, we recognize that the aggregation of water demands to large regions may underestimate the possibility of cascading impact of binding water constraints at the local level. The use of sub-basins brings about additional challenges of upstream and downstream interdependencies, and mismatch in spatial and temporal scales within the GCAM regions and AEZs. Supplies and demands of are aggregated to the annual temporal scale and GCAM supplies and demands for all goods and services are resolved at 5-year annual intervals. Seasonal and monthly variations in water supply and demand are not currently represented. The impact of these variations, however, depends not only on the flexibility for demand-side management of water and the reservoir storage capacity that mitigate their potential impact, but also on the flexibility of the overall economic system in responding to the volatility in the production of agricultural and industrial commodities, energy services, and municipal demands. As an initial approach to balancing water demand and supply, we have chosen the river basin and annual time-step as the appropriate common scale that allows for estimates of water supply and demand where the economic decision integrates information on all goods and services, including water availability. Our initial effort is focused on understanding the major long-term regional and global drivers that lead to gross imbalances in the supply and demand for water resources. Identifying the most appropriate spatial (grid, sub-basin, or basin) and temporal (daily, monthly, or yearly) scales for reconciling water demands and supplies in a global integrated assessment model is an ongoing focus of our continuing research. Table S1: Energy cost of pumping groundwater ($/m3) No. GCAM Region Percentile 1 5 10 50 90 95 99 1 USA $0.0001 $0.0011 $0.0025 $0.0225 $0.0806 $0.0958 $0.1215 2 Canada $0.0000 $0.0003 $0.0009 $0.0082 $0.0317 $0.0482 $0.0822 3 Western Europe $0.0004 $0.0035 $0.0065 $0.0258 $0.0614 $0.0719 $0.0913 4 Japan $0.0008 $0.0028 $0.0069 $0.0336 $0.0617 $0.0689 $0.0813 5 Australia & NZ $0.0006 $0.0017 $0.0031 $0.0207 $0.0565 $0.0684 $0.0948 6 Former Soviet Union $0.0001 $0.0007 $0.0015 $0.0091 $0.0339 $0.0454 $0.0724 7 China $0.0002 $0.0009 $0.0026 $0.0224 $0.0693 $0.0827 $0.1053 8 Middle East $0.0006 $0.0023 $0.0052 $0.0335 $0.0758 $0.0838 $0.0941 9 Africa $0.0004 $0.0016 $0.0040 $0.0246 $0.0793 $0.1031 $0.1475 10 Latin America $0.0003 $0.0007 $0.0011 $0.0172 $0.0733 $0.0897 $0.1176 11 Southeast Asia $0.0002 $0.0007 $0.0013 $0.0262 $0.0744 $0.0844 $0.1041 12 Eastern Europe $0.0006 $0.0023 $0.0050 $0.0266 $0.0571 $0.0639 $0.0731 13 Korea $0.0026 $0.0144 $0.0202 $0.0477 $0.0607 $0.0642 $0.0681 14 India $0.0004 $0.0008 $0.0011 $0.0150 $0.0585 $0.0807 $0.1025 Table S2: Estimated cost of desalination in the US and globe Desalination Wangnick/GWI (2005) Zhou and Tol (2005) water source Share (%) Cost ($/m3) Global USA Global USA Sea 56% 7% 1 1 Brackish 24% 51% 0.6 0.6 River 9% 26% 0.6 0.6 Waste water 6% 9% 0.6 0.6 Pure 5% 7% 0.6 0.6 Brine 0% 0% SUM 100% 100% 0.824 0.628 Table S3. Comparison of representative water price differential between the agricultural and energy sectors Water Price Agriculture Water Coefficient (m^3/kg) ($/m^3) Water Cost ($/kg) Crop Price ($/kg) Water Cost Share Corn 0.42 0.10 0.042 0.10 43% Rice 0.80 0.10 0.080 0.66 12% Wheat 0.58 0.10 Water Price 0.058 0.13 Elect Price 45% ($/GJ) Water Cost Share Electricity Water Coefficient (m^3/GJ) ($/m^3) Water Cost ($/GJ) Coal Conv. 2.24 0.10 0.22 15.26 1.5% Gas CC 0.20 0.10 0.02 13.71 0.15% Nuclear 1.65 0.10 0.17 15.89 1.0% Figure S1. Schematic of GCAM structure with the inclusion of the water system Figure S2. Schematic of the overall market-based approach across all goods and services in GCAM (a) (b) (c) Figure S3. (a) Gridded estimates of mean water table depth in meters with global coverage based on the work by Fan et al. (2013); (b) cumulative distribution of mean water table depth for each of the 14 GCAM regions; (c) the equivalent cumulative distribution of energy cost associated with pumping ground water for each GCAM region. Figure S4. Procedure for estimating the total amount of desalinated water at the basin scale in 2005 Figure S5. Schematic of the water allocation mechanism at the basin scale in GCAM Figure S6. Percent changes in crop productions between the water constrained and unconstrained scenarios by GCAM region; negative values indicate decrease in crop productions when water is constrained in GCAM. Figure S7. Percent change in global crop productions (a) and prices (b) for the three major cereal crops (corn, rice, and wheat) between the water constrained and unconstrained scenarios.