Beyond the Tap: The Value of Alternative Water Sources for Climate Adaptation

This study utilizes a Computable General Equilibrium (CGE) model, specifically GTAP-AW, to analyze the economic implications of alternative water sectors in addressing natural water scarcity, with a focus on the Mediterranean region. Recognizing the growing water scarcity worsened by climate change, the research incorporates alternative water sources—desalination and treated wastewater—into the economic framework, establishing a direct link with natural water as a primary factor of production. The study offers a thorough evaluation of how shifts in the availability and management of water resources, both natural and alternative, as well as climate-driven changes in land and water productivity, can influence vital sectors and the overall economy, especially under climate-driven water shortages.

The research hypothesizes that, despite higher financial and energy costs, the adoption of alternative water sources in water-scarce areas provides significant social benefits by reducing the impacts of natural water shortages, supporting food security, and sustaining economic growth. Results indicate that under the SSP2–RCP4.5 scenario, decreases in natural water availability and declining irrigation water productivity place strong pressure on agriculture, energy production, and GDP. Nevertheless, when desalination and treated wastewater can substitute for scarce natural water—as in the GTAP-AWH specification—these negative effects are substantially mitigated. The findings emphasize the economic value of alternative water sources and advocate for including detailed technical substitution and innovation capabilities into CGE models to better evaluate the economy-wide potential to substitute capital and other inputs with water.

The abstract is sub,itted for the session HS5.3.1: Water resources policy and management - balancing the water, food, energy and environment nexus for sustainable and resilient water systems under global change