The transboundary impacts of trade liberalization and climate change on the Nile basin economies and water resource availability

T.N. Kahsay, O.J. Kuik, R. Brouwer, Pieter van der Zaag

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Abstract

A multi-country, multi-sector computable general equilibrium (CGE) model is used for the first time to evaluate the economic and water resource availability effects of trade liberalization (removal of import tariffs) and facilitation (reducing non-tariff barriers) under climate change in the Nile Basin. The analysis uses the GTAP 9 Database and the GTAP-W model that distinguishes between rainfed and irrigated agriculture and implements water as a factor of production directly substitutable in the production process of irrigated agriculture. A full trade liberalization and improved trade facilitation scenario is considered with and without climate change. The study reveals that trade liberalization and facilitation generates substantial economic benefits and enhances economic growth and welfare in the Nile basin. The effect of
instituting a free trade policy on water savings is found to be limited, while climate change improves water supply and hence irrigation water use, enhancing economic growth and welfare in the basin.
Original languageEnglish
Pages (from-to)935-947
Number of pages13
JournalWater Resources Management
Volume32
Issue number3
Early online date3 Nov 2017
DOIs
Publication statusPublished - Feb 2018

Keywords

  • Climate change
  • Computable general equilibrium model
  • Nile River Basin
  • Trade liberalization

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