The reclamation of wastewater is an increasingly important water source in parts of the world. It is claimed that wastewater recycling is a cheap and reliable form of water supply, which preserves water resources and is economically efficient. However, the quantity of reclaimed wastewater depends on water consumption by economic agents connected to a sewage system. This study uses a Computable General Equilibrium (CGE) model to analyse such a cascading water system. A case study of Israel shows that failing to include this linkage can lead to an overestimation of the potential of wastewater recycling, especially when economic agents engage in water saving.
Keywords: Cascading water use; Computable General Equilibrium model; STAGE_W; Shadow price; Wastewater reclamation; Wastewater recycling.
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