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A General Equilibrium Analysis Of Conjunctive Ground And Surface Water Use With An Application To Morocco

Listed author(s):
  • Diao, Xinshen
  • Dinar, Ariel
  • Roe, Terry L.
  • Tsur, Yacov

Groundwater resources (GW) account for nearly 30 percent of the world sustainable water supplies. Yet, this resource, which is fraught with externalities, has largely been left unregulated. The economic literature on GW is predominantly of a partial equilibrium type, taking the rest of the economy parametrically. We analyze GW regulation in a general equilibrium setting, focusing on the stabilization value of GW under natural (draught) and economic (rural-urban water transfer) shocks. A general equilibrium approach allows evaluating direct and indirect effects of GW regulation on agriculture and non-agriculture sectors and extends the scope for water policy. The analysis is applied to Morocco by extending an existing computable general equilibrium (CGE) model to include ground and surface water (SW) resources. We study effects of (i) an increase in GW extraction cost (e.g., as a result of prolonged extraction beyond natural recharge that lowers the aquifer's water table), (ii) a transfer of SW from rural (irrigation) to urban (domestic) use, and (iii) a reduction of water availability due to severe drought. We estimate the value of GW and assess the direct (partial equilibrium) and indirect (general equilibrium) impacts. We find that GW has a critical role in mitigating the negative effects of these types of shocks.

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Paper provided by Hebrew University of Jerusalem, Department of Agricultural Economics and Management in its series Discussion Papers with number 7143.

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Date of creation: 2007
Handle: RePEc:ags:huaedp:7143
Contact details of provider: Postal:
Faculty of Agriculture, Food and Environmental Quality Sciences Hebrew University of Jerusalem, P.O. Box 12, Rehovot 76100

Phone: 08-9481230
Fax: 08-9466267
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  1. Rosegrant, Mark W. & Cai, Ximing & Cline, Sarah A., 2002. "Water and food to 2025," 2020 vision briefs 13, International Food Policy Research Institute (IFPRI).
  2. Knapp Keith C. & Olson Lars J., 1995. "The Economics of Conjunctive Groundwater Management with Stochastic Surface Supplies," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 340-356, May.
  3. Tsur, Yacov & Graham-Tomasi, Theodore, 1991. "The buffer value of groundwater with stochastic surface water supplies," Journal of Environmental Economics and Management, Elsevier, vol. 21(3), pages 201-224, November.
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