Joint Centers of Excellence Program
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Computable General Equilibrium Regional Saudi Inclusive Wealth Model

CHALLENGES

According to the U.N. 2012 and 2014 reports, Saudi Arabia’s Inclusive Wealth (sum of Natural, Human and Produced Capital) is increasing, but its Inclusive Wealth per capita is decreasing. In order to establish a more sustainable path, the distribution of inclusive (total) wealth of the Kingdom needs to be better understood in terms of both its spatial and temporal distributions.

To plan sustainable infrastructure in critical systems such as energy, water and agriculture, key investments, trade-offs, and decisions must be made. For example, the location and technology-type of desalination and power plants; or the preservation of strategic water resources at the cost of agriculture yields.

These decisions are constrained by environmental boundary conditions such as the effect of seasonally varying levels of seawater salinity and temperature on desalination plants, or the effects of dust storms and dust deposition rates on solar panels.

OBJECTIVES

The project seeks to answer the following key research questions:

-To what extent is the Inclusive Wealth (IW) assessment of KSA previously performed by the U.N. in 2012 and 2014 accurate and where are the largest uncertainties?

- What is the regional distribution of Inclusive Wealth in the Kingdom and how can transformations of one form of capital to another and inter-regional transfers best be represented using CGER/GIS?

- What is the role of Solar Desalination, Renewable Energy, and Agriculture in enhancing the IW of Saudi Arabia by 2050?

Deliverables:

The project will produce a comprehensive model to simulate the critical and interacting sectors in Saudi Arabia. The model will utilize a Geographic Information System (GIS) approach and an interface to enable collaboration between stakeholders within regions to effectively negotiate the best plans for equitable development across the Kingdom.

METHODOLOGY

This project combines the Inclusive Wealth (IW) and Computable General Equilibrium (CGE) frameworks in a system-of-systems implementation. The Inclusive Wealth framework captures the performance of stocks (natural, produced, and human capital) while the Computable General Equilibrium framework tracks the flows and distribution of resources throughout the Kingdom.

Via nested CGE models, the economy of Saudi Arabia is modeled geospatially through the utilization of appropriate boundary conditions. This methodology thus captures the dynamics between regions, as well as Saudi Arabia’s over-all impact on the world, and the world’s impact on Saudi Arabia.

This project builds upon previous work at CCES, namely the Sustainable Infrastructure Planning Systems (SIPS) and Strategic Solar Desalination Network (SSDN) projects to evaluate policies for the development of Saudi Arabia’s water and energy infrastructures. It also synchronizes with ongoing CCES projects to take account for these systems continued development and interaction with the natural environment.