| Abstract: | Abstract Desalination of seawater is becoming an important source of drinking water in many cities and towns, where the demand for water continues to increase, while the supply of fresh water is limited. We examine the economic aspects of several environmental issues that arise during consideration of desalination projects. We present a conceptual framework that demonstrates the differences between public and private objectives, and we use that framework to describe policies that can encourage firms and consumers to consider environmental impacts. Public policies can be implemented also to stimulate technological developments that will reduce the environmental impacts of desalination. We also examine the potential growth inducement effects of seawater desalination by describing the likely impacts of desalination on both the demand and supply components of the market for municipal water in a coastal area. |
