Water Banking as a Strategy for the Management and Conservation of a Critical Resource: A Case Study from Tunisia’s Medjerda River Basin (MRB)

The increasingly adverse impacts of climate change (e.g., rainfall patterns, droughts, and floods), coupled with the ever-increasing water demands, are often translated into a contingent liability for water users’ communities. Additional complexities arise due to competing priorities, water rights, and transboundary water sources. Therefore, conventional water management practices should shift toward more comprehensive and responsive integrative approaches, even for systems with limited data. Furthermore, water managers must prioritize dynamic and interactive management techniques for existing systems. One such management technique is water banking, which is the focus of this study. Herein, a dynamic interactive water allocation model, which encompasses the water managers and heterogeneous parties with competing demands, is developed. The voluntary sales of water shares between parties are illustrated through the specific case of the Medjerda River in Tunisia, an excellent example of a transboundary basin with limited hydrologic data and conflicting water use requirements between its upstream and downstream sectors. A set of scenarios is developed for the first analysis with this model: two management scenarios that include the no-water trade and the water banking option; three demand scenarios that include a combination of steady-, low-, and high-water demand conditions; and two hydrologic scenarios that include dry and wet conditions. Based on an economic model, the economic impacts of water banking are calculated using estimates of the costs of water shortages brought to users that illustrate the magnitude. The results show that the water banking technique can improve water resource availability by optimizing the management, operation, and conservation of natural and artificial water storage systems and water distribution infrastructure. Specifically, water banking can offset users’ profit losses during severe conditions (i.e., drought), even with limited hydrologic data. This water management technique would allow the Tunisian government to minimize the economic impacts on farmers from drought and to plan for future uncertainties by optimizing the water storage potential in years of abundant rainfall.