Economic concepts to address future water supply-demand imbalances in Iran, Morocco and Saudi Arabia

In Middle East and North Africa (MENA) countries, renewable groundwater and surface water supply are limited while demand for water is growing rapidly. Climate change is expected to increase water demand even further. The main aim of this paper is to evaluate the water supply–demand imbalances in Iran, Morocco and Saudi Arabia in 2040–2050 under dry, average and wet climate change projections and to show on the basis of the marginal cost and marginal value of water the optimum mix of supply-side and demand-side adjustments to address the imbalance. A hydrological model has been used to estimate the water supply–demand imbalance. Water supply and demand curves have been used to explore for which (marginal value of) water usage the marginal cost of supply-enhancement becomes too expensive. The results indicate that in the future in all cases, except in Iran under the wet climate projection, the quantity of water demanded has to be reduced considerably to address the imbalance, which is indeed what is currently happening already.