Economics, water management, and conflict resolution in the Middle East and beyond

Environment

Volumn 48, Issue 3, 2006, Pages 26-41

  Fisher, Franklin M ^a   Huber Lee, Annette ^b  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^b STOCKHOLM ENVIRONMENT INSTITUTE   (Sweden)

Author keywords

[No Author keywords available]

Indexed keywords

GROUND WATER; WATER;

AQUIFER; COST; DESALINATION; ECONOMICS; ENVIRONMENTAL PROTECTION; MIDDLE EAST; POLITICS; RESOURCE ALLOCATION; REVIEW; WAR; WATER MANAGEMENT;

EID: 33645274628     PISSN: 00139157     EISSN: None     Source Type: Journal    
DOI: 10.3200/ENVT.48.3.26-41     Document Type: Review

References (28)

1. F. M. Fisher, A. Huber-Lee, I. Amir, S. Arlosoroff, Z. Eckstein, M. J. Haddadin, S. G. Hamati, A. M. Jarrar, A. F. Jayyousi, U. Shamir, and H. Wesseling (with special contributions by A. Z. Salman and E. K. Al-Karablieh), Liquid Assets: An Economic approach for Water Management and Conflict Resolution in the Middle East and Beyond (Washington, DC: Resources for the Future (RFF) Press, 2005).
2. The term "Palestine" is used here without implying any political view. It is used not only for convenience but also out of respect for our Palestinian colleagues.
3. P. Simon, "In an Empty Cup, a Threat to Peace," New York Times, 14 August 2001.
4. See also P. Simon, Tapped Out: The Coming Water Crisis and What We Can Do about It (New York: Welcome Rain, 1998).
5. For another example, see M. T. Klare, "The New Geography of Conflict," Foreign Affairs 80 (May/June, 2001): 56-7, 59-60.
6. See also P. H. Gleick, "Water, War, and Peace in the Middle East," Environment 36, no. 3 (April 1994): 6-15, 35-42.
7. Estimates of the cost of desalination vary. Israel has let contracts at $0.50 per cubic meter; other estimates are higher than $0.60 per cubic meter. The general results presented are not at all sensitive to such variations. That is so for two reasons: First, the propositions that desalination costs provide an upper bound on the value of disputed water and that the level of that upper bound is not high would remain true for all reasonable estimates. Second, in fact, even at $0.60 per cubic meter, desalination is not likely to be an efficient technology on the Mediterranean coast for at least the next 15 years, except in times of extreme drought. That conclusion would apply even at desalination costs somewhat below $0.60 per cubic meter. It is important to understand that, while desalination cost does provide a useful upper bound to water values, generally, the value of water is substantially below that bound.
8. This assumes that the efficient use of such water would be to supply the coastal cities. That is almost certainly true, but even if it were not, the principle being illustrated would still hold (with different numbers).
9. G. Fishelson, remarks at the conference of the Institute for Social and Economic Policy in the Middle East, London, U.K., 1990.
10. This is an application of the Coase Theorem of economics. See R. Coase, "The Problem of Social Cost," Journal of Law and Economics 1 (1960): 1-44.
11. The pioneering version of such a model (although one that does not explicitly perform maximization of net benefits) is that of Z. Eckstein, D. Zackay, Y. Nachtom, and G. Fishelson, "The Allocation of Water Resources between Israel, the West Bank and Gaza-An Economic Analysis," Economic Quarterly 41 (1994): 331-69 (Hebrew).
12. There is a large body of literature and much discussion about actual free water markets, but it is crucial to understand that what is proposed here is not such a market. A system of water trading among (in this case) countries is recommended in the text (in the section "Conflict Resolution: Cooperation and Gains from Trading Water Permits," above), but even such trading is not at freely bargained prices but rather at prices and quantities prescribed by joint operation of an optimizing model. Hence, the water market literature is not discussed explicitly.
13. A multi-year version of the Water Allocation System (WAS) model is now under development.
14. The total amount consumers are willing to pay for an amount of water (Q*) is measured by the area up to Q* under their (consumers') aggregate demand curve for water. Note that "willingness to pay" includes ability to pay. The provision of water to consumers who are very poor is taken to be a matter for government policy embodied in the pricing decisions made by the user of WAS.
15. If this calculation gives a negative figure, then scarcity rent is zero, and water is not scarce at the given location.
16. The infeasibility listed for the Jordan Valley Settlements in the drought case reflects the fact that the full amount of subsidized water required for the supply of agriculture there cannot be delivered.
17. Israel is currently proposing to build such a system (with the desalination plant in Israel rather than in Palestine) despite its obvious inefficiency.
18. The Disi Aquifer is sufficiently large that pumping it at this rate will not exhaust it for many years.
19. If the only problem in Jordanian water management were the coming crisis in Amman, this could be readily solved by a further expansion of the conveyance system for bringing water from the Jordan River to the capital. (It is interesting to note that expansion of the conveyance system, not additional water ownership, is what would be directly involved.) However, this would divert the river water from its current principal use in which it is mixed with wastewater and used in agriculture in the Jordan Valley. Jordan could not then continue to subsidize Jordan Valley agriculture. The effects of such an action are not readily captured without an analysis of the social consequences.
20. If trading ownership rights that are considered sovereign is unacceptable, the parties can agree to trade short-term permits to use each others' water. See the text above, in the section "Conflict Resolution: Cooperation and Gains from Trading Water Permits."
21. The reason this calculation appears to assume away conveyance costs is that the desalinated water would not be conveyed to the Banias or Jordan rivers but would be used at the seacoast to replace Jordan River water that would otherwise be conveyed there in the Israeli National Carrier.
22. The question arises as to what the effects on Syria and Lebanon (respectively) would be in these two situations. Without a WAS model for those two countries, it is difficult to answer that question. Both countries would surely profit from such a model.
23. F. Fisher et al., note 1 above, also analyzes cooperation between Israel and Jordan and among all three parties.
24. The "Mountain Aquifer" actually consists of several sub-aquifers. It is very difficult to secure accurate information on how the water in each of these is now divided. The 76-24 percent split mentioned in the text is therefore an approximation applying to the total. In the runs reported below, where necessary, that split has been used to represent existing circumstances. The general conclusions are not affected by this, and the quantitative results cannot be far off.
25. The results discussed in this section are all for years of normal hydrology. Results for drought years are not qualitatively different, although the numbers are larger.
26. The gains with this division are so large as to dominate the scale of the figure. This must be taken into account in examining the results.
27. While the qualitative conclusions remain the same, the quantitative results are substantially different from those presented in F. Fisher, et al., "Optimal Water Management and Conflict Resolution: The Middle East Water Project," Water Resources Research 10.1029/2001WR000943, 16 November 2002. This is due partly to improved data, but mostly it is attributed to a more realistic treatment of intra-district leakage in Palestine, which affects the value of water.
28. There would also have to be a conveyance line. A refusal by Israel to permit this would be a serious matter-an act whose principal intent would be to harm Palestine. In such an event, Palestinian pumping of the Mountain Aquifer beyond agreed-upon amounts would have to continue, but there would be larger, non-water issues to worry about.