AbstractLarge increases in water demand with very little recharge have strained Libya’s groundwater resources, resulting in serious declines in water levels and quality, especially along the Mediterranean coast where most of the agricultural, domestic and industrial activities are concentrated. To meet these increases, Libya turned to desalination as a supplementary water resource as early as 1964. Both thermal and membrane desalination technologies have been used. This study shows that the problem of water scarcity is likely to increase further in the future.
This study has three aims: first, to estimate the historical relationship between population growth and the various uses of water; second, to forecast water consumption according to the various uses; third, to estimate the elasticities of water demand and examine the effect of price, income, population and temperature on water demand in Libya in the short and long-run.
To achieve these aims, an econometric model of Libyan water demand is constructed and estimated for the period 1975-2005, using the Box-Jenkins approach to forecast water demand and the Engle-Granger two-step approach to estimate the short and long-run elasticities of water demand. As a result this study provides considerable information for policy makers concerning current and future Libyan water demand.
By examining the relationships between population growth and the future consumption of water in Libya, it is possible to reach the following conclusions.
• Population growth in Libya will be very high
• Population elasticities for water demand are elastic for agricultural, domestic and industrial purposes. Water demand for all purposes is extremely elastic.
• Most of the population and agricultural lands are concentrated in the northern part of the country.
• The Libyan economy depends heavily on underground water.
• In Libya, as a whole, water demand will increase. Available water in 2020 will be less than half of water demands, implying an increase in the water scarcity problem over time.
• The short and long-run price elasticties are negative, suggesting that there is an inverse relationship between water demands and price. Also, these elasticities indicate that water use is generally inelastic with respect to price.
• The income elasticities are all positive in the short and long-run. This result accords with demand theory , implying that water is a normal good
• The estimation results suggest that, in the long-run, water demand for agricultural, domestic and industrial use is highly elastic for population and inelastic for price and income.
• The short-run elasticities are less than the long-run elasticities, as economic theory suggests. Also, all elasticities in the short-run are less than one. This implies that water demand is inelastic in the short-run.
|Date of Award||Apr 2009|
|Sponsors||Faculty of Economics at Garyounis University|