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Mitigating Water Scarcity In Israel – A Computable General Equilibrium Analysis


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  • Luckmann, Jonas
  • Siddig, Khalid H.A.
  • Flaig, Dorothee
  • Grethe, Harald


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 de-clining supply of natural fresh water (ground and surface water) and the increasing utilization of alternative water sources (recycled wastewater, brackish water, desalinated seawater). To ac-count for different production structures and usage options, a single country Computable Gen-eral Equilibrium (CGE) model is used, in which several water activities produce differentiated water commodities. These water commodities are used as intermediate inputs in other produc-tion activities or are consumed by households. Results suggest that especially the agricultural sector would be affected by a reduction of natu-ral 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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Bibliographic Info

Paper provided by German Association of Agricultural Economists (GEWISOLA) in its series 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 with number 133942.

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Date of creation: 2012
Date of revision:
Handle: RePEc:ags:gewi12:133942

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Keywords: CGE; water; wastewater reclamation; desalination; CES nesting structure; Israel; Wasser; Abwasseraufbereitung; Abwasserrückgewinnung; Entsalzung; CES; Israel; Agricultural and Food Policy; Resource /Energy Economics and Policy;

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  1. Fleischer, Aliza & Lichtman, Ivgenia & Mendelsohn, Robert, 2007. "Climate change, irrigation, and Israeli agriculture : will warming be harmful ?," Policy Research Working Paper Series 4135, The World Bank.
  2. 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.
  3. 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.
  4. Ziv Bar-Shira & Israel Finkelshtain & Avi Simhon, 2006. "Block-Rate versus Uniform Water Pricing in Agriculture: An Empirical Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 986-999.
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