Authors: Doron Lavee, Michael Ritov, Nir Becker
Addresses: Department of Economics and Management, Tel-Hai College, Upper Galilee 12210, Israel and Pareto-Engineering Ltd., Netania, Israel. ' Pareto-Engineering Ltd., Netania, Israel. ' Department of Economics and Management, Tel-Hai College, Upper Galilee 12210, Israel
Abstract: Significant progress in seawater desalination technology has lowered its costs considerably, making it an attractive option to policy makers in countries facing water shortages. However, in making the decision to implement desalination, two issues are often ignored: firstly, seawater desalination is also associated with external costs. Secondly, alternative measures of managing water shortage may potentially be more cost-efficient. The current study estimates the external costs of desalination, and then compares the full costs of desalination with those associated with three alternative solutions for water supply shortage: increasing wastewater reclamation and reuse, investing in water savers and reducing the amount of water used in the agricultural sector. The main contribution of this paper is thus in providing a complete methodological framework for the evaluation of desalination projects, taking into account both direct and external costs. Contrary to common wisdom, the study reveals that desalination is the least economically efficient and sustainable of all alternatives considered, even without taking into account the externalities involved.
Keywords: Israel; seawater desalination; water policy; cost-effectiveness analysis; externalities; water pricing; sustainability; sustainable development; water shortage; water supply; direct costs; external costs.
International Journal of Sustainable Economy, 2011 Vol.3 No.4, pp.410 - 424
Published online: 04 Oct 2011 *Full-text access for editors Access for subscribers Purchase this article Comment on this article