A never-ending debate: Demand versus supply water policies. A CGE analysis for Catalonia

Maria Llop and Xavier Ponce Alifonso
Authors registered in the RePEc Author Service: Xavier Ponce-Alifonso

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: Water scarcity is a long-standing problem in Catalonia, as there are significant differences in the spatial and temporal distribution of water through the territory. There has consequently been a debate for many years about whether the solution to water scarcity must be considered in terms of efficiency or equity, the role that the public sector must play and the role that market-based instruments should play in water management. The aim of this paper is to use a Computable General Equilibrium (CGE) model to analyze the advantages and disadvantages associated with different policy instruments, from both a supply and a demand viewpoint, which can be applied to water management in Catalonia. We also introduce an ecological sector in our CGE model, allowing us to analyze the environmental impact of the alternative policies simulated. The calibration of the exogenous variables of the CGE model is performed by using a Social Accounting Matrix (SAM) for the Catalan economy with 2001 data. The results suggest that taking into account the principle of sustainability of the resource, the policy debate between supply and demand in water policies is obsolete, and a new combination of policies is required to respect the different values associated with water. Keywords: Water Policies; Computable General Equilibrium Model; Economic Effects; Environmental Effects.

Keywords: Aigua -- Polítiques de gestió; 33 - Economia (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-agr and nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:urv:wpaper:2072/152139

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