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The Department of Environmental Economics and Management

The Robert H. Smith Faculty
of Agriculture, Food and Environment
The Hebrew University of Jerusalem

PO Box 12, Rehovot 76100
Fax: 08-9466267

Department Head:
Prof. Ayal Kimhi, Tel: 08-9489376

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Meital Kappach, Tel: 08-9489230

Large-Scale Desalination and the External Impact on Irrigation-Water Salinity: Economic Analysis for the Case of Israel

Citation:

Slater, Y. ; Finkelshtain, I. ; Reznik, A. ; Kan, I. Large-Scale Desalination and the External Impact on Irrigation-Water Salinity: Economic Analysis for the Case of Israel. Water Resources Research 2020, 56, e2019WR025657.

Abstract:

Abstract Recent agroeconomic studies in water-scarce countries such as Spain, Australia, Saudi Arabia, and Israel have revealed the economic viability of irrigating high-value crops with desalinated water. However, the worldwide growth of large-scale desalination capacities is primarily designed to resolve urban-water scarcity, disregarding the impact of desalination on irrigation-water salinity. We develop a dynamic hydroeconomic programming model where infrastructure capacities and allocations of water quantities and salinities in a regional water distribution network are endogenous. We show that subsidizing desalination is socially warranted because the associated reduction in irrigation-water salinity is an external effect of water consumption by all water users. Empirical application to the entire state of Israel indicates that large-scale desalination of seawater and treated wastewater for irrigation is optimal. This result stems from the large share of irrigation-intensive salinity-sensitive high-value crops, motivated by Israel's policies to support local agriculture. Ignoring salinity results in a 45% reduction in desalinated irrigation water, a 29% reduction in farming profits, a 250% increase in water suppliers' profits, and an average deadweight loss of \$1,200 a year per hectare of arable land.

Notes:

e2019WR025657 2019WR025657

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