*3.4. Salinity Damage*

Here, we discuss three ways to measure irrigation water salinity damage. The first follows Slater et al. [35] and uses the MYWAS-VALUE to evaluate salinity damage in the context of water infrastructure development. In that work, two optimal infrastructural development scenarios were compared: one accounting for changes in irrigation water salinity throughout the planning horizon and the other considering fixed salinity; the difference between the two scenarios reflects the damage associated with salinity when it is ignored when designing water infrastructures. The assessment of that damage in terms of the value of agricultural produce in Slater et al. [35] was USD 1200 per hectare. By repeating the evaluation procedure under the FB and RB scenarios, we obtained per hectare damage of USD 1195 and USD 1326, respectively, i.e., an additional USD 131 per hectare due to RB.

Another way to express the economic damage caused by the salinity of irrigation water is to measure the relationship between salinity and the VMP of the irrigation water. To that end, we use the variability in the water VMPs and salinities across the agricultural regions that were incorporated into MYWAS-VALUE. In panels (a) and (b) of Figure 7, we plot the regional average VMP of the irrigation water versus the respective average salinity levels under the FB and RB scenarios (the data reported in Figure 7 exclude the most southern region, Arava, which is both detached from the country's main water distribution network and is characterized by extremely dry conditions). The regional irrigation water VMPs vary between USD 0.6 per cubic meter to almost zero across regions, with an average of USD 0.34 and USD 0.31 per cubic meter under FB and RB, respectively. Notice the larger variability in the regional average salinities under RB, which stems from the low usage of saline water in some regions with high shares of salinity-sensitive crops. The linear trendlines fitted to the data indicate a clear negative relationship between the water VMP and salinity, with a steeper slope under FB compared to under RB. On average, a salinity increase of 1 dS m−<sup>1</sup> reduces the water VMP by USD 0.39 and USD 0.30 per cubic meter for the cases of FB and RB, respectively. In terms of elasticity, a 1% increase in the average salinity of the irrigation water supplied to a region reduces the value of marginal product of that water by 2.4% and 1.6% under field and regional blending, respectively (we obtained

elasticities by estimating the equation ln(*VMPi*) = *α* + *β* ln(*salinityi*) + *εi*, in which *i* is the region index, *α* is the intercept, and the slope coefficient *β* represents the elasticity).

**Figure 7.** Regional VMPs of irrigation water and its salinity plotted against regional average salinities under the field blending and regional blending scenarios.

Recall that both the regional salinity and VMP of the water are endogenous in the model, and therefore, the curves depicted in Figure 7 represent the socially optimal relations between these measures rather than the marginal impact of salinity on the VMP. Our third measure of salinity damage is the VMP of the salinity itself; that is, the extent to which irrigation water with a higher salinity reduces the value of the agricultural production in a region. The VMP of the salinity is the shadow value of the salt balance constraint, which imposes equality between the amount of salt carried by the irrigation water supplied to a region and the salt content of the irrigation water applied to the crops. We obtained a welfare reduction of USD 525 and USD 534 million a year for a salinity increase of 1 dS m−<sup>1</sup> under FB and RB, respectively. In panels (c) and (d) of Figure 7, we plotted the regional VMP of salinity divided by the regional amount of irrigation water (the units are USD (dS m−1) <sup>−</sup><sup>1</sup> m−3) against the regional average salinity. Per average cubic meter of irrigation water, the VMP of the salinity is similar under both scenarios, amounting to about USD −0.42 per dS m−1. The trendlines fitted to the data indicate that the salinity is characterized by diminishing marginal damage, where a salinity increase of 1 dS m−<sup>1</sup> reduces the marginal damage by USD 0.21 and USD 0.23 per dS m−<sup>1</sup> per cubic meter of irrigation water under the FB and RB scenarios, respectively.
