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

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,

Article:

Poster:

Session: OS2b Environment and its variability

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