Trading the economic value of unsatisfied municipal water demand

Modelling and optimization techniques for water resources allocation are proposed to identify the economic value of the unsatisfied municipal water demand against demands emerging from other sectors. While this is always an important step in integrated water resource management perspective, it became crucial for water scarce Countries. In fact, since the competition for the resource is high, they are in crucial need to trade values which will help them in satisfying their policies and needs. In this framework, hydro-economic, social equity and environmental constraints need to be satisfied. In the present study, a hydro-economic decision model based on optimization schemes has been developed for water resources allocation, that enable the evaluation of the economic cost of a deficiency in fulfilling the municipal demand. Moreover, the model enables efficient water resources management, satisfying the demand and proposing additional water resources options. The formulated model is designed to maximize the demand satisfaction and minimize water production cost subject to system priorities, preferences and constraints. The demand priorities are defined based on the effect of demand dissatisfaction, while hydrogeological and physical characteristics of the resources are embedded as constraints in the optimization problem. The application to the City of Amman is presented. Amman is the Capital City of the Hashemite Kingdom of Jordan, a Country located in the south-eastern area of the Mediterranean, on the East Bank of the Jordan River. The main challenge for Jordan, that threat the development and prosperity of all sectors, is the extreme water scarcity. In fact, Jordan is classified as semi-arid to arid region with limited financial resources and unprecedented population growth. While the easy solution directly goes to the simple but expensive approach to cover the demand, case study results show that the proposed model plays a major role in providing directions to decision makers to orient their policies and strategies in order to achieve sustainability of scarce water resources, satisfaction of the minimum required demand as well as financial sustainability. In addition, results map out national needs and priorities that are crucial in understanding and controlling the complexity of Jordan's water sector, mainly for the city of Amman.