NDLI: Modelling Sectorally Differentiated Water Prices - Water Preservation and Welfare Gains Through Price Reform?

Content Provider	Springer Nature Link
Author	Luckmann, Jonas Flaig, Dorothee Grethe, Harald Siddig, Khalid
Copyright Year	2016
Abstract	This study simulates the economy-wide effects of introducing new water pricing systems in Israel. A Computable General Equilibrium (CGE) model, STAGE_W, is used that includes multiple water commodities produced from different water resources. The current water pricing scheme supplies potable water to municipalities at fees above the supply costs and subsidizes water delivered to the agricultural and the manufacturing sectors. Due to limited freshwater resources, climate change and population growth, water scarcity is an increasing problem in Israel. Therefore, pricing systems which lead to a more efficient allocation of water are intensely debated. This study analyzes two alternative pricing schemes under discussion in Israel: price liberalization, which unifies the prices for all potable water consumers at cost recovery rates, and marginal pricing that lifts the potable water price to the cost of desalination. Both schemes reduce water demand with limited economic costs. Price liberalization is the more favourable option from a national welfare perspective, while marginal pricing allows for larger water savings and, in the long run, independence from fresh water resources.
Starting Page	2327
Ending Page	2342
Page Count	16
File Format	PDF
ISSN	09204741
Journal	Water Resources Management
Volume Number	30
Issue Number	7
e-ISSN	15731650
Language	English
Publisher	Springer Netherlands
Publisher Date	2016-03-18
Publisher Institution	European Water Resources Association (EWRA)
Publisher Place	Dordrecht
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Water policy Cost recovery price Marginal pricing Wastewater reclamation Desalination Israel Hydrogeology Hydrology/Water Resources Geotechnical Engineering & Applied Earth Sciences Atmospheric Sciences Civil Engineering Environment
Content Type	Text
Resource Type	Article
Subject	Water Science and Technology Civil and Structural Engineering

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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