The Hidden Value of Private Water Markets in Jordan: Simulating Spatial Price Equilibria in a Coupled Hydro-Economic Model
Christian J. A. Klassert1, Jim Yoon2, Katja Sigel1, Erik Gawel1, Bernd Klauer1, Samer Talozi3, Thibaut Lachaut4, Philip David Selby5, Stephen Knox5, Steven M. Gorelick6, Amaury Thilmant4, Julien J Harou5, Daanish Mustafa7, Josue Medellin-Azuara8, Deepthi Rajsekhar6, Nicolas Avisse9 and Hua Zhang10, (1)Helmholtz Centre for Environmental Research UFZ Leipzig, Department of Economics, Leipzig, Germany, (2)Pacific Northwest National Laboratory, Richland, CA, United States, (3)Jordan University of Science and Technology, Irbid, Jordan, (4)Laval University, Civil and Water Engineering, Quebec City, QC, Canada, (5)University of Manchester, School of Mechanical, Aerospace and Civil Engineering, Manchester, United Kingdom, (6)Stanford University, Earth System Science, Stanford, CA, United States, (7)King's College London, London, United Kingdom, (8)University of California Davis, Civil and Environmental Engineering, Davis, CA, United States, (9)Laval University, Civil and Water Engineering, Quebec City, Canada, (10)Texas A&M University Corpus Christi, College of Science and Engineering, Corpus Christi, TX, United States
December 2019 American Geophysical Union meeting, San Francisco, California
Abstract: In many arid countries, private markets for water deliveries via tanker trucks have emerged as a solution for the shortcomings of public water supply networks. In Jordan, where the piped water access of households and businesses often lasts less than two days per week, the benefits of tanker water as an alternative supply source compete with the negative impacts of pumping it from rapidly dwindling groundwater sources. The partly informal nature of Jordan's tanker water markets prevents effective monitoring of their groundwater abstractions. Tanker water markets thereby impede efforts by the government to manage Jordan's coupled human-water system in the interest of long-run sustainability.
Here, we apply a spatial price-equilibrium approach within a coupled hydroeconomic multi-agent system to simulate unobserved tanker water sales in the present, and to assess the potential role of tanker water supply in the long run. We model the demand of 1,823 water user agents for piped and tanker water based on raw survey data from 15,811 representative households and 342 quantitative interviews with commercial establishments. Water supply is simulated based on agricultural optimizations in each subdistrict of Jordan to determine the rural opportunity costs of well water, and transportation costs derived from road distances between large samples of wells and localities. Agents’ piped and tanker water consumption exchanges monthly feedbacks with a country-wide groundwater model, allowing us to capture the dynamics of the coupled human-water system both above and below the ground.
The model shows that the total quantity of water supplied via private tanker water markets is about ten times as large as official records suggest. This implies substantial impacts on groundwater sustainability. We also find, however, that the economic benefits tanker water generates for users vulnerable to public water supply interruptions are almost twice as high as the amount of money they pay for it. This result cautions against simple restrictions on any private activity exceeding current licenses. We project a growing future economic role of tanker water markets, but also increasingly negative sustainability impacts, calling for an integrated management approach that reflects both considerations.