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Integrating water balance and cost-effectiveness analysis for water management: An application in Jordan and Lebanon

Congress: 2008
Author(s): Stéphanie Aulong(1), Madjid Bouzit(2), Nathalie Dorfliger(1), Fadi Comair(3), Emad Al-Karablieh(4), Amer Salman(4)
(1) BRGM, Water Department, Montpellier, France (2) BRGM, Water Department, Orléans, France (3) WEERC/Notre Dame University, Louaizeh, Zouk Mikhael, Lebanon (4) WERSC, University of Jordan, Amman, Jordan

Keyword(s): Annualised costs, cost-effectiveness analysis, Jordan, Lebanon, present value, water balance,
AbstractThis paper is part of the European MEDITATE project (MEditerranean Development of Innovative Technologies for integrAted waTer managEment). A cost-effectiveness analysis (CEA) was carried out in two water catchments: Chekka Bay (CB) in Lebanon and Amman Zarqa Basin (AZB) in Jordan. The primary purpose is to report on the use of CEA in two orientation and information contexts. A secondary purpose is to discuss the results of the two CEA and compare them in terms of policy support for a sustainable water management. After the assessment of the water balances over the period 2005-2030, the future water deficits are estimated. In CB, the deficit between water withdrawals and natural renewable resource is estimated to 127 MCM/year in 2030, whereas in AZB it reaches 268 MCM/year. For the purpose of the study, these values were set as the objective to overcome by 2030 for the programmes of measures of CB and AZB. The current state of policies implementation differentiates both sites. The Kingdom of Jordan carries on a strong political strategy of water resource development and efficient water uses. The Lebanese government recently handled a water supply strategy based on dams and hill lakes construction. As the data sets on costs and efficiency of the measures are different in the two cases, the CEA are carried out with different cost-effectiveness indicators. We used a first indicator based on total annualised costs divided by yearly expected water that we test in both cases. In AZB where measures are well identified and planned, we used the average incremental economic cost indicator (AIEC) based on the present value of costs divided by the present value of water over the project life. CEA applied to CB water issue shows that numerous measures should be considered to avoid the 2030 water gap since the current dam strategy will not be satisfying on its own. In AZB, the current on going measures appear the most cost-effective ones, confirming authorities’ choices from an economic viewpoint. They fulfil 86% of the water gap justifying additional measures but the two projected large scaled schemes remain disproportionate compared to the water needs. In both case studies, the annualised costs method gives the same ranking of measures. When AIEC is used, cost-efficiency range is wider, favouring small scaled projects. This indicator is also closer to the concept of marginal cost of water as it takes into account discounted costs and water distribution. However, controversies exist about the discounting of water physical quantities, authors arguing water consumption should be discounted then switching from physical to utility metric. The CEA implementation in these two case studies points the least-cost combination of measures to fulfil the water deficit at the catchment scale. However, uncertainties on measures costs and water quantities constitute serious limitations to the method. Besides, the method used ignores the complexity of water transfers from one catchment to another and disregards the water efficiency use between water catchments. Knowing this, decision makers should consider CEA cautiously integrating complementary criterias in their decision processes.
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