TITLE

Residential Water Scarcity in Cyprus: Impact of Climate Change and Policy Options

AUTHOR(S)
Zachariadis, Theodoros
PUB. DATE
December 2010
SOURCE
Water (20734441);Dec2010, Vol. 2 Issue 4, p788
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper presents an assessment of the cost of water scarcity in Cyprus, today and in the next 20 years, taking into account the effect of projected climate change in the region. It focuses on the residential sector, accounting also for tourism and industry. Using a simple demand function, total scarcity costs in Cyprus are computed for the period 2010-2030, and three scenarios of future water demand are presented. The central estimate shows that the present value of total costs due to water shortages will amount to 72 million Euros (at 2009 prices), and, if future water demand increases a little faster, these costs may reach 200 million Euros. Using forecasts of regional climate models, costs are found to be about 20% higher in a ?climate change? scenario. Compared to the loss of consumer surplus due to water shortages, desalination is found to be a costly solution, even if environmental damage costs from the operation of desalination plants are not accounted for. Finally, dynamic constrained optimization is employed and shows that efficient residential water prices should include a scarcity price of about 40 Eurocents per cubic meter at 2009 prices; this would constitute a 30-100% increase in current prices faced by residential consumers. Reductions in rainfall due to climate change would raise this price by another 2-3 Eurocents. Such a pricing policy would provide a clear long-term signal to consumers and firms and could substantially contribute to a sustainable use of water resources in the island.
ACCESSION #
57995026

 

Share

Read the Article

Courtesy of NEW JERSEY STATE LIBRARY

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics