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


  • 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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  • Diao, Xinshen & Dinar, Ariel & Roe, Terry L. & Tsur, Yacov, 2007. "A General Equilibrium Analysis Of Conjunctive Ground And Surface Water Use With An Application To Morocco," Discussion Papers 7143, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  • Handle: RePEc:ags:huaedp:7143

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    References listed on IDEAS

    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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    Cited by:

    1. Susanne Scheierling & David O. Treguer & James F. Booker, 2016. "Water Productivity in Agriculture: Looking for Water in the Agricultural Productivity and Efficiency Literature," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 1-33, September.
    2. 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.
    3. Magdalena ZACHLOD-JELEC & Piotr KARP, "undated". "Responses of the Polish Economy to Demand and Supply Shocks under Alternative Fiscal Rules," EcoMod2010 259600174, EcoMod.
    4. Zvi Baum & Ruslana Rachel Palatnik & Iddo Kan & Mickey Rapaport-Rom, 2016. "Economic Impacts of Water Scarcity Under Diverse Water Salinities," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-22, March.
    5. Ouraich, Ismail & Tyner, Wallace E., 2014. "Morocco.s unique situation in the climate change arena: An analysis of climate forecasts and their link to agriculture," WIDER Working Paper Series 088, World Institute for Development Economic Research (UNU-WIDER).
    6. Siddig, Khalid, 2011. "Modeling the Impact of Drought on Agriculture and Food Security in Sudan," 2011 Conference: Impacts of Climate Change on Agriculture, December 6-7, 2011, Rabat, Morocco 188123, Moroccan Association of Agricultural Economics (AMAEco).
    7. Feng Wu & Jinyan Zhan & Qian Zhang & Zhongxiao Sun & Zhan Wang, 2014. "Evaluating Impacts of Industrial Transformation on Water Consumption in the Heihe River Basin of Northwest China," Sustainability, MDPI, Open Access Journal, vol. 6(11), pages 1-14, November.
    8. Yerushalmi, Erez, 2012. "Measuring the administrative water allocation mechanism and agricultural amenities," The Warwick Economics Research Paper Series (TWERPS) 992, University of Warwick, Department of Economics.
    9. 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.
    10. Wu, Feng & Zhan, Jinyan & Güneralp, İnci, 2015. "Present and future of urban water balance in the rapidly urbanizing Heihe River Basin, Northwest China," Ecological Modelling, Elsevier, vol. 318(C), pages 254-264.
    11. Claudia Heidecke & Thomas Heckelei, 2010. "Impacts of changing water inflow distributions on irrigation and farm income along the Drâa River in Morocco," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 135-149, March.
    12. Ouraich, Ismail & Tyner, Wallace E., 2014. "Climate change impacts on Moroccan agriculture and the whole economy: An analysis of the impacts of the Plan Maroc Vert in Morocco," WIDER Working Paper Series 083, World Institute for Development Economic Research (UNU-WIDER).
    13. Ouraich, Ismail & Tyner, Wallace E., 2011. "A CGE Analysis of Economy-wide Impacts of Climate Change on Agriculture in Morocco," 2011 Conference: Impacts of Climate Change on Agriculture, December 6-7, 2011, Rabat, Morocco 188121, Moroccan Association of Agricultural Economics (AMAEco).
    14. Brent, Daniel A., 2013. "The Value of Heterogeneous Property Rights: The Costs of Water Volatility," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149698, Agricultural and Applied Economics Association.
    15. Maganga, Assa & Malakini, Memory, 2015. "Agrarian Impact of Climate Change in Malawi: A Quantile Ricardian Analysis," 2015 Conference, August 9-14, 2015, Milan, Italy 212208, International Association of Agricultural Economists.

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