Trade-offs in water policy: System-wide implications of changing water availability and agricultural productivity in the Mediterranean economies by 2050

Roberto Roson and Martina Sartori

No 332416, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: We evaluate the structural consequences of water availability scenarios in the Mediterranean, following a bottom-up methodology. This includes an assessment of future water availability and a general equilibrium analysis of changes in agricultural productivity. Lower productivity in agriculture, induced by reduced water availability, generates negative consequences in terms of real income and welfare. The magnitude of the loss depends on the amount of the productivity shock, but also on the share of agricultural activities in the economy and on the stringency of the environmental regulation. Our results suggest that countries in Middle East and North Africa could respond to increasing water scarcity by accepting, to some extent, lower environmental quality (deterioration of aquatic environments). Furthermore, improvements in water efficiency appear to curb the economic impact of water scarcity quite significantly, especially for northern Mediterranean countries.

Keywords: Resource/Energy Economics and Policy; Productivity Analysis (search for similar items in EconPapers)
Pages: 20
Date: 2013
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Working Paper: Trade-offs in water policy: System-wide implications of changing water availability and agricultural productivity in the Mediterranean economies by 2050 (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332416

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