Weekly Departmental Seminar- Environmental Economics and Management
Speaker: Dr. Jonas Luckmann
Bio: Jonas Luckmann is lecturer and researcher at the International Agricultural Trade and Development Group of Humboldt University of Berlin since 2016. His main research interests focus on economic modelling of the water sector using simulation models. He developed a general equilibrium model centered on the water sector and published in several internationally peer-reviewed journals. He is associate editor of the journal Water Economics and Policy, and consultant for various international organizations
Subject: Water management under climate variability – a stochastic economy-wide
Abstract: Uncertainty is not often systematically analyzed in computable general equilibrium (CGE) modelling. Especially this is holds for climate variability, despite of its growing economic relevance. In this study, we employ a Monte Carlo approach to integrate stochastic variability of rainfall induced freshwater recharge in a water-focused CGE model of the Israeli economy. We investigate the economy-wide consequences of applying water pricing policies to avoid over drafting of freshwater resources under different desalination-capacity regimes. We find that with current water pricing, in only about 45% of the years water demand remains below the renewable freshwater recharge rate. In order to avoid over drafting in 90% of the years, water prices would need to be doubled for all users. This results in a drop of crop production by 4.5% and GDP-losses of 0.3%. On the household level the welfare effects are overall negative but differ according to income-quintile, resulting in a redistribution of welfare. Expanding the desalination-capacity results in much less adverse economy-wide effects as well as less more balanced and negative effects to households’ welfare. This suggests that from an economy-wide perspective in light of sustainable water management, expanding the desalination capacity is superior to managing the water sector by demand-side measures only.
The online meeting will be held on Sunday, December 19th , 2021. 13:15-14:30
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Meeting ID: 833 6535 2762