222
cubic metre presented in Fig. 14.7 . Assuming a 2 % interest rate, which is justifi ed
by the low ecological discount rate to be used in environmental projects of this sort
(see Gollier 2010 ), the required surcharge (which will raise the annual proceeds
needed to cover the annual costs) is zero for the Southern Mediterranean Project and
USD 0.1/m
3 for the Red Sea (pipeline, tariff regime B) Project.
Regarding the Northern Mediterranean Project, the cost of desalination and conveyance to Naharayim–Bakura is about USD 0.5/m
3 (recall that the conveyance cost
is covered by the profi t of the pumped energy operation). From there, the water
fl ows to the Dead Sea, partially restoring the lower Jordan River along the way. The
Dead Sea reclamation cost is therefore the USD 0.5/m
3 minus the benefi t associated
with the lower Jordan River restoration. The latter benefi t, as discussed above, lies
in the upper half of the USD 0.23/m
3 –USD 0.87/m
3 span estimated by Becker et al.
( 2014 ) (the higher values refer to restoration with good quality water and the lower
values to restoration with recycled water). Assuming also that the fl ow of water
under this alternative will be the fl ow needed to stabilise the Dead Sea at its current
level (700–800 × 10
6 m
3 /year), we conclude that the surcharge needed to cover the
Dead Sea reclamation costs should range between zero and USD 0.1/m
3 .
Regarding the alternative of combining recycled water and a mini Red Sea–Dead
Sea Project, it was found that the benefi t associated with using the recycled water
for the lower Jordan River restoration will outweigh the costs of the recycled water,
leaving only the costs of the mini Red Sea–Dead Sea Project. The USD/m
3 cost of
the mini project will be similar to that of its large (full)-scale counterpart, which was
found to be about USD 0.1/m
3 (see Fig. 14.4 ). However, the mini Red Sea–Dead
Sea Project will discharge only 360 × 10
6 m
3 /year of brine into the Dead Sea, which
is less than a third of its large (full)-scale counterpart considered above. Accordingly,
the annual costs will be about a third of the annual costs of the large (full)-scale
project, and the surcharge will accordingly be about a third of that under the largescale project, i.e. about USD 0.03/m
3 (recall that the surcharge is levied on the same
quantity of diverted water as under the large-scale project).
To sum up, following the logic of the polluter pays principle, we offer a mechanism to fi nance a Dead Sea reclamation project by levying a surcharge on all diversions that otherwise would have reached the Dead Sea. These diversions are estimate
at about 1,100 × 10
6 m
3
/year (850 × 10
6 m
3
/year of upstream diversions plus
262 × 10
6 m
3
/year consumed by the potash industries). The surcharge rate is calculated such that the annual proceeds cover the cost of the reclamation project. Because
the costs vary across alternatives, so will the surcharge rates. Under a 2 % capital
cost (consistent with ecological discount rate), the surcharge needed to cover the
cost of the Red Sea and Southern Mediterranean Projects is USD 0.1/m
3 and zero,
respectively. The surcharge needed to cover the costs of the Northern Mediterranean
Project is between zero (if the subtracted lower Jordan River restoration benefi t is
low) and USD 0.1/m
3 (if the subtracted lower Jordan River restoration is high). The
surcharge needed to cover the costs of the alternative combining recycled water and
a mini Red Sea–Dead Sea Project is about USD 0.03/m
3
. The feasibility of imposing
these surcharge rates determines the feasibility of reclaiming the Dead Sea.
A.I.H. Malkawi and Y. Tsur
cubic metre presented in Fig. 14.7 . Assuming a 2 % interest rate, which is justifi ed
by the low ecological discount rate to be used in environmental projects of this sort
(see Gollier 2010 ), the required surcharge (which will raise the annual proceeds
needed to cover the annual costs) is zero for the Southern Mediterranean Project and
USD 0.1/m
3 for the Red Sea (pipeline, tariff regime B) Project.
Regarding the Northern Mediterranean Project, the cost of desalination and conveyance to Naharayim–Bakura is about USD 0.5/m
3 (recall that the conveyance cost
is covered by the profi t of the pumped energy operation). From there, the water
fl ows to the Dead Sea, partially restoring the lower Jordan River along the way. The
Dead Sea reclamation cost is therefore the USD 0.5/m
3 minus the benefi t associated
with the lower Jordan River restoration. The latter benefi t, as discussed above, lies
in the upper half of the USD 0.23/m
3 –USD 0.87/m
3 span estimated by Becker et al.
( 2014 ) (the higher values refer to restoration with good quality water and the lower
values to restoration with recycled water). Assuming also that the fl ow of water
under this alternative will be the fl ow needed to stabilise the Dead Sea at its current
level (700–800 × 10
6 m
3 /year), we conclude that the surcharge needed to cover the
Dead Sea reclamation costs should range between zero and USD 0.1/m
3 .
Regarding the alternative of combining recycled water and a mini Red Sea–Dead
Sea Project, it was found that the benefi t associated with using the recycled water
for the lower Jordan River restoration will outweigh the costs of the recycled water,
leaving only the costs of the mini Red Sea–Dead Sea Project. The USD/m
3 cost of
the mini project will be similar to that of its large (full)-scale counterpart, which was
found to be about USD 0.1/m
3 (see Fig. 14.4 ). However, the mini Red Sea–Dead
Sea Project will discharge only 360 × 10
6 m
3 /year of brine into the Dead Sea, which
is less than a third of its large (full)-scale counterpart considered above. Accordingly,
the annual costs will be about a third of the annual costs of the large (full)-scale
project, and the surcharge will accordingly be about a third of that under the largescale project, i.e. about USD 0.03/m
3 (recall that the surcharge is levied on the same
quantity of diverted water as under the large-scale project).
To sum up, following the logic of the polluter pays principle, we offer a mechanism to fi nance a Dead Sea reclamation project by levying a surcharge on all diversions that otherwise would have reached the Dead Sea. These diversions are estimate
at about 1,100 × 10
6 m
3
/year (850 × 10
6 m
3
/year of upstream diversions plus
262 × 10
6 m
3
/year consumed by the potash industries). The surcharge rate is calculated such that the annual proceeds cover the cost of the reclamation project. Because
the costs vary across alternatives, so will the surcharge rates. Under a 2 % capital
cost (consistent with ecological discount rate), the surcharge needed to cover the
cost of the Red Sea and Southern Mediterranean Projects is USD 0.1/m
3 and zero,
respectively. The surcharge needed to cover the costs of the Northern Mediterranean
Project is between zero (if the subtracted lower Jordan River restoration benefi t is
low) and USD 0.1/m
3 (if the subtracted lower Jordan River restoration is high). The
surcharge needed to cover the costs of the alternative combining recycled water and
a mini Red Sea–Dead Sea Project is about USD 0.03/m
3
. The feasibility of imposing
these surcharge rates determines the feasibility of reclaiming the Dead Sea.
A.I.H. Malkawi and Y. Tsur