Water Pricing Model

The study utilizes a high-resolution model of Israel's water supply to determine that current desalination capacity significantly exceeds optimal levels, even under climate-change-induced recharge declines. It further finds that the 'Balanced Budget Water Economy' legislation imposes a welfare cost exceeding USD 100 million annually due to the gap between average and marginal costs.

• The optimal aggregated desalination capacity in Israel is significantly lower than current levels, representing only 33% of present capacity and 57% of 2010 capacity. This suggests that the construction of desalination plants, which started in 2005, could have been postponed.
• Even if groundwater recharge declines by 40% due to climate change, the model indicates that only 50% of the current desalination capacity would be required.
• The Israeli Balanced Budget Water Economy legislation results in a welfare cost of over USD 100 million per year, which is approximately 10% of the water economy's share of the GDP, because average costs are nearly 50% higher than marginal costs.

APA

Stockholm Environment Institute (2016). Water Pricing Model. https://www.sei.org/publications/water-pricing-model/

Chicago

Stockholm Environment Institute. Water Pricing Model. 2016. https://www.sei.org/publications/water-pricing-model/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Water Pricing Model |date=13 July 2016 |url=https://www.sei.org/publications/water-pricing-model/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2016water, author = {{Stockholm Environment Institute}}, title = {{Water Pricing Model}}, institution = {Stockholm Environment Institute}, year = {2016}, month = jul, url = {https://www.sei.org/publications/water-pricing-model/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }