Is desalination the most sustainable alternative for water-shortage mitigation in Israel?

Significant progress in seawater desalination technology has lowered its costs considerably, making it an attractive option to policy makers in countries facing water shortages. However, in making the decision to implement desalination, two issues are often ignored: firstly, seawater desalination is also associated with external costs. Secondly, alternative measures of managing water shortage may potentially be more cost-efficient. The current study estimates the external costs of desalination, and then compares the full costs of desalination with those associated with three alternative solutions for water supply shortage: increasing wastewater reclamation and reuse, investing in water savers and reducing the amount of water used in the agricultural sector. The main contribution of this paper is thus in providing a complete methodological framework for the evaluation of desalination projects, taking into account both direct and external costs. Contrary to common wisdom, the study reveals that desalination is the least economically efficient and sustainable of all alternatives considered, even without taking into account the externalities involved.