Water scarcity induced by population growth, economic growth and climate change is a burning issue all over the globe. Sustainable management of water aims at maximising the value of water to society while minimising impacts on vulnerable communities. DHI and COWI, a Northern European consulting group, are currently developing an economic model to address this issue in one of the world's largest transboundary river basins, the Aral Sea Basin. The model is set up in cooperation with Global Water Partnership and may be applied in other transboundary river basins.
In the last century, river discharges into the Aral Sea have drastically decreased, resulting in an ongoing desiccation of the Aral Sea and adverse environmental effects, both in terms of the size of the affected population and the degree of environmental degradation. Proper management of water resources across borders is required to find sustainable and comprehensive solutions.
The economic model developed by DHI and COWI will support policy makers in the region by assessing the optimal allocation of water across countries and sectors. It is based on a comprehensive economic analysis of the use and conservation of water resources in the Aral Sea Basin, including the riparian countries (Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan) across five sectors (agriculture, energy, industry, domestic and nature).
The model will focus on three principles for managing water resources:
- Efficiency (especially in irrigation)
- Effectiveness (exploring whether re-allocation of water between sectors, e.g. from agriculture to hydropower, increases its total economic value in the basin)
- Equity (winners and losers of changes in water allocation).
The project is launched and governed by the International Fund for Saving the Aral Sea (IFAS) with financial support from the USAID.
The model uses the GAMS (General Algebraic Modelling System) software package originally developed by economists at the World Bank. A number of scenarios will be developed to assess potential climate change impacts. Stakeholders throughout the region will be involved in model development, and IFAS staff will be trained in the use of the model.
Photo: Albina Shuyska, COWI