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A general equilibrium approach to model water scarcity in Israel

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  • Luckmann, J.
  • Siddig, K.
  • Flaig, D.
  • Grethe, H.

Abstract

Water is a scarce resource in Israel. With fluctuating supplies and an increasing demand, the need for using alternative water sources such as reclaimed wastewater, brackish groundwater and desalinated seawater increases. This paper investigates the economy-wide effects of a declining supply of natural fresh water (ground and surface water) and the increasing utilization of alternative water sources (recycled wastewater, brackish water, desalinated seawater). To account for different production structures and usage options, a single country Computable General Equilibrium (CGE) model is used, in which several water activities produce differentiated water commodities. These water commodities are used as intermediate inputs in other production activities or are consumed by households. Results suggest that especially the agricultural sector would be affected by a reduction of natural fresh water availability, as it is the largest water user. However, the effect can be mitigated if substitution possibilities with alternative water sources are increased, especially the desalination of seawater can contribute to this. The rest of the economy is affected to a lesser extent, as water is only a minor input in other sectors and the water sector itself is small compared to the whole Israeli economy.
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Suggested Citation

  • Luckmann, J. & Siddig, K. & Flaig, D. & Grethe, H., 2013. "A general equilibrium approach to model water scarcity in Israel," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    • Handle: RePEc:ags:gewipr:261093
    DOI: 10.22004/ag.econ.261093
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    References listed on IDEAS

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    1. Fleischer, Aliza & Lichtman, Ivgenia & Mendelsohn, Robert, 2008. "Climate change, irrigation, and Israeli agriculture: Will warming be harmful?," Ecological Economics, Elsevier, vol. 65(3), pages 508-515, April.
    2. Saleth, R. Maria & Dinar, Ariel, 1999. "Water challenge and institutional response (a cross-country perspective)," Policy Research Working Paper Series 2045, The World Bank.
    3. Maureen T. Rimmer & Alan A. Powell, 1992. "An Implicitly Directly Additive Demand System: Estimates for Australia," Centre of Policy Studies/IMPACT Centre Working Papers op-73, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Dolores Tirado & Carlos M. Gómez & Javier Lozano, 2006. "Efficiency improvements and water policy in the balearic islands: a general equilibrium approach," Investigaciones Economicas, Fundación SEPI, vol. 30(3), pages 441-463, September.
    5. Amir, I. & Fisher, F. M., 2000. "Response of near-optimal agricultural production to water policies," Agricultural Systems, Elsevier, vol. 64(2), pages 115-130, May.
    6. Kislev, Yoav, 2001. "The Water Economy Of Israel," Discussion Papers 14995, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
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    Cited by:

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    2. Dinar, Ariel, 2012. "Economy-wide implications of direct and indirect policy interventions in the water sector: lessons from recent work and future research needs," Policy Research Working Paper Series 6068, The World Bank.

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