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The Impact Of Trade Liberalisation On Water Use: A Computable General Equilibrium Analysis

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  • Maria Berrittella
  • Katrin Rehdanz
  • Richard S.J. Tol

    () (Economic and Social Research Institute, Dublin, Ireland)

  • Jian Zhang

Abstract

We used that GTAP-W model – GTAP5 with water resources added – to estimate the impact of hypothetical Doha-like liberalization of agricultural trade on water use. Three conclusions emerge. First, the change in regional water use is less than 10%, even if agricultural tariffs are reduced by 75%. Second, patterns are non-linear. Water use may go up for partial liberalization, and down for more complete liberalization. This is because different crops respond differently to tariff reductions, but also because trade and competition matter too. Third, trade liberalization tends to reduce water use in water scarce regions, and increase water use in water abundant regions, even though there no water markets in most countries.

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File URL: http://www.fnu.zmaw.de/fileadmin/fnu-files/publication/working-papers/cgewaterdohawp.pdf
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Bibliographic Info

Paper provided by Research unit Sustainability and Global Change, Hamburg University in its series Working Papers with number FNU-142.

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Length: 27 pages
Date of creation: Aug 2007
Date of revision: Aug 2007
Publication status: Forthcoming, Journal of Economic Integration
Handle: RePEc:sgc:wpaper:142

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Keywords: Computable General Equilibrium; Trade Liberalization; Water Policy; Water Scarcity;

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References

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  1. Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September.
  2. Hiro Lee & Joaquim Oliveira Martins & Dominique van der Mensbrugghe, 1994. "The OECD Green Model: An Updated Overview," OECD Development Centre Working Papers 97, OECD Publishing.
  3. Colin Kirkpatrick & David Parker, 2005. "Domestic Regulation and the WTO: The Case of Water Services in Developing Countries," The World Economy, Wiley Blackwell, vol. 28(10), pages 1491-1508, October.
  4. Decaluwé, B. & Patry, A. & Savard, L., 1999. "When Water is no Longer Heaven Sent: Comparative Pricing Analysis in an AGE Model," Cahiers de recherche 9908, Université Laval - Département d'économique.
  5. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Water Pricing: A Computable General Equilibrium Analysis," Working Papers FNU-96, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2006.
  6. Diao, Xinshen & Roe, Terry, 2003. "Can a water market avert the "double-whammy" of trade reform and lead to a "win-win" outcome?," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 708-723, May.
  7. Anthony Letsoalo & James Blignaut & Theuns de Wet & Martin de Wit & Sebastiaan Hess & Richard S.J. Tol & Jan van Heerden, 2005. "Triple Dividends Of Water Consumption Charges In South Africa," Working Papers FNU-62, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2005.
  8. Jean-Christophe Bureau & Sébastien Jean, Alan Matthews, 2005. "The consequences of agricultural trade liberalization for developing countries: distinguishing between genuine benefits and false hopes," The Institute for International Integration Studies Discussion Paper Series iiisdp073, IIIS.
  9. Maria Berrittella & Katrin Rehdanz & Arjen Y. Hoekstra & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Restricted Water Supply: A Computable General Equilibrium Analysis," Working Papers FNU-93, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2006.
  10. Anderson, Kym & Martin, Will & van der Mensbrugghe, Dominique, 2005. "Would Multilateral Trade Reform Benefit Sub-Saharan Africans?," CEPR Discussion Papers 5049, C.E.P.R. Discussion Papers.
  11. Joseph Francois & Hans van Meijl & Frank van Tongeren, 2005. "Trade liberalization in the Doha Development Round," Economic Policy, CEPR & CES & MSH, vol. 20(42), pages 349-391, 04.
  12. Maria Berrittella & Katrin Rehdanz & Richard S.J. Tol, 2006. "The Economic Impact Of The South-North Water Transfer Project In China: A Computable General Equilibrium Analysis," Working Papers FNU-117, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2006.
  13. Strzepek, Kenneth M. & Yohe, Gary W. & Tol, Richard S.J. & Rosegrant, Mark W., 2008. "The value of the high Aswan Dam to the Egyptian economy," Ecological Economics, Elsevier, vol. 66(1), pages 117-126, May.
  14. Kirkpatrick, Colin & George, Clive, 2004. "Trade and Development: Assessing the Impact of Trade Liberalisation on Sustainable Development," Impact Assessment Research Centre (IARC) Working Papers 30579, University of Manchester, Institute for Development Policy and Management (IDPM).
  15. Noelwah R. Netusil & Thomas R. Harris & Chang K. Seung & Jeffrey E. Englin, 2000. "Impacts of water reallocation: A combined computable general equilibrium and recreation demand model approach," The Annals of Regional Science, Springer, vol. 34(4), pages 473-487.
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Citations

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Cited by:
  1. Roberto Ponce & Francesco Bosello & Carlo Giupponi, 2012. "Integrating Water Resources into Computable General Equilibrium Models - A Survey," Working Papers 2012.57, Fondazione Eni Enrico Mattei.
  2. Alvaro Calzadilla & Katrin Rehdanz & Richard S.J. Tol, 2008. "The Eonomic Impact Of More Sustainable Water Use In Agriculture: A Computable General Equilibrium Analysis," Working Papers FNU-169, Research unit Sustainability and Global Change, Hamburg University, revised Dec 2008.
  3. Alvaro Calzadilla & Katrin Rehdanz & Richard Betts & Pete Falloon & Andy Wiltshire & Richard S.J. Tol, 2010. "Climate Change Impacts on Global Agriculture," Working Papers FNU-185, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2010.
  4. 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.
  5. Alvaro Calzadilla & Katrin Rehdanz & Richard S.J. Tol, 2008. "Water scarcity and the impact of improved irrigation management: A CGE analysis," Kiel Working Papers 1436, Kiel Institute for the World Economy.
  6. Sahlén, Linda, 2009. "Essays on Environmental and Development Economics - Public Policy, Resource Prices and Global Warming," UmeÃ¥ Economic Studies 762, Umeå University, Department of Economics.
  7. Dritan Osmani, . "A note on optimal transfer schemes, stable coalition for environmental protection and joint maximization assumption," Working Papers FNU-176, Research unit Sustainability and Global Change, Hamburg University.

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