Desalination and Alternative Water-Shortage Mitigation Options in Israel: A Comparative Cost Analysis

Costs for seawater desalination have dropped significantly over the past decade due to technological advances. This has increased the attractiveness of desalination to policy-makers as a means to address water supply shortages. Israel, a country that faces chronic water scarcity, is in the process of developing wide-scale desalination capacity that is projected to supply all of the nation's domestic water use within a few years. Two issues are often neglected, however, by policy-makers pursuing desalination. The first is that seawater desalination is associated with a number of external costs, consideration of which may influence the optimal scale and timing of desalination implementation. The second is that alternative measures for managing water scarcity, including conservation techniques, are often more cost-efficient. This study estimates the full cost of desalination in Israel, including externalities, and then compares this to the costs of several alternative options for addressing water scarcity, including both demand management and supply augmentation measures. We find that desalination, despite being the primary policy option pursued by Israel, is among the least cost-efficient of all the alternatives considered, even without taking into account the externalities involved.