221
14.5 How to Cover the Cost of Dead Sea Reclamation?
Using any of the alternatives discussed earlier to halt the decline of the Dead Sea
level or to restore its historical state infl icts costs (except for the Southern
Mediterranean Project under 2 % capital cost). This raises the questions stated in the
title of this section. The problem arises because environmental amenities, such as
the Dead Sea reclamation, have public good characteristics, and as such market
mechanisms fail to allocate them properly. This feature often (though not always)
implies that the value of an amenity cannot be inferred from market prices; hence,
the need to use alternative approaches to obtain WTP measures, such as the contingent valuation method used by Becker et al. ( 2014 ), complicates the regulation
needed to correct the failure. In the present context, the market failure arises because
the benefi ts of reclaiming the Dead Sea (stabilising or restoring) stem from many
reasons and affect different groups, some more directly (e.g. the hotels that will suffer less from deteriorating roads) and some indirectly (e.g. present and future pilgrims who aspire to see the Dead Sea ecosystem as it was during times of
prophecy).
The issue of who should pay for environmental restoration (those who perpetrated the damage, or who stand to benefi t from the restoration, or who suffer from
the damage) and how to extract the correct sum from the different groups (polluters,
benefi ciaries, victims) is central to any environmental policy (see discussion in
Goulder and Parry 2008 , and the references therein). We propose here a simple
mechanism to cover the costs of a Dead Sea reclamation project, based on a widely
used environmental policy principle known as the polluter pays principle. The basic
idea is to levy a surcharge on any cubic metres of water that would have reached the
Dead Sea had it not been extracted or diverted upstream. This applies to diversions
from the Jordan River (including Lake Tiberias), from the Yarmuk River (by Jordan)
and from side wadies (tributaries) that fl ow into the Jordan River or directly into the
Dead Sea (e.g. Zarqa, Mujib). It also applies to the 262 × 10
6 m
3 /year diversions
(evaporation) of the Israeli and Jordanian potash industries (Zbranek 2013 ).
The exact surcharge rate will vary across the alternatives based on the cost of
each alternative. We calculate the range of surcharge rates corresponding to the
costs of the alternatives discussed above. As noted in the introduction, the total
upstream diversion based on historical fl ows is about 1,500 × 10
6 m
3
/year (TAHAL
and GSI 2011 ). Allowing for a decline in average precipitation due to climate change
(Weinberger et al. 2012 ), we assume that total diversion today is about 1,300 × 10
6 m
3
/
year, of which 460 × 10
6 m
3
/year is diverted from the Yarmuk River, mostly by Syria
(which is excluded from the mechanism for a number of reasons, including the fact
that it is not a Dead Sea riparian). The remaining diversions to be taxed are therefore
about 1,100 × 10
6 m
3
/year, accounting for about 850 × 10
6 m
3
/year of upstream diversions plus the 262 × 10
6 m
3
/year consumed by the potash industries. This quantity is
similar to the 1,150 × 10
6 m
3
/year to be discharged into the Dead Sea by the (fullscale) Red Sea and Southern Mediterranean Sea Projects. The surcharge per cubic
metre needed to cover the costs of these projects is therefore equal to the costs per
14 Reclaiming the Dead Sea: Alternatives for Action
14.5 How to Cover the Cost of Dead Sea Reclamation?
Using any of the alternatives discussed earlier to halt the decline of the Dead Sea
level or to restore its historical state infl icts costs (except for the Southern
Mediterranean Project under 2 % capital cost). This raises the questions stated in the
title of this section. The problem arises because environmental amenities, such as
the Dead Sea reclamation, have public good characteristics, and as such market
mechanisms fail to allocate them properly. This feature often (though not always)
implies that the value of an amenity cannot be inferred from market prices; hence,
the need to use alternative approaches to obtain WTP measures, such as the contingent valuation method used by Becker et al. ( 2014 ), complicates the regulation
needed to correct the failure. In the present context, the market failure arises because
the benefi ts of reclaiming the Dead Sea (stabilising or restoring) stem from many
reasons and affect different groups, some more directly (e.g. the hotels that will suffer less from deteriorating roads) and some indirectly (e.g. present and future pilgrims who aspire to see the Dead Sea ecosystem as it was during times of
prophecy).
The issue of who should pay for environmental restoration (those who perpetrated the damage, or who stand to benefi t from the restoration, or who suffer from
the damage) and how to extract the correct sum from the different groups (polluters,
benefi ciaries, victims) is central to any environmental policy (see discussion in
Goulder and Parry 2008 , and the references therein). We propose here a simple
mechanism to cover the costs of a Dead Sea reclamation project, based on a widely
used environmental policy principle known as the polluter pays principle. The basic
idea is to levy a surcharge on any cubic metres of water that would have reached the
Dead Sea had it not been extracted or diverted upstream. This applies to diversions
from the Jordan River (including Lake Tiberias), from the Yarmuk River (by Jordan)
and from side wadies (tributaries) that fl ow into the Jordan River or directly into the
Dead Sea (e.g. Zarqa, Mujib). It also applies to the 262 × 10
6 m
3 /year diversions
(evaporation) of the Israeli and Jordanian potash industries (Zbranek 2013 ).
The exact surcharge rate will vary across the alternatives based on the cost of
each alternative. We calculate the range of surcharge rates corresponding to the
costs of the alternatives discussed above. As noted in the introduction, the total
upstream diversion based on historical fl ows is about 1,500 × 10
6 m
3
/year (TAHAL
and GSI 2011 ). Allowing for a decline in average precipitation due to climate change
(Weinberger et al. 2012 ), we assume that total diversion today is about 1,300 × 10
6 m
3
/
year, of which 460 × 10
6 m
3
/year is diverted from the Yarmuk River, mostly by Syria
(which is excluded from the mechanism for a number of reasons, including the fact
that it is not a Dead Sea riparian). The remaining diversions to be taxed are therefore
about 1,100 × 10
6 m
3
/year, accounting for about 850 × 10
6 m
3
/year of upstream diversions plus the 262 × 10
6 m
3
/year consumed by the potash industries. This quantity is
similar to the 1,150 × 10
6 m
3
/year to be discharged into the Dead Sea by the (fullscale) Red Sea and Southern Mediterranean Sea Projects. The surcharge per cubic
metre needed to cover the costs of these projects is therefore equal to the costs per
14 Reclaiming the Dead Sea: Alternatives for Action