Unveiling the True Cost of Water: Isle develops holistic water sector cost model for the UAE
Isle developed a numerical model to determine the true cost of water in the Abu Dhabi Emirate.
The UAE is the 7th most water-stressed country globally. It relies heavily on desalinated water for commercial and industrial purposes, while farmers depend on over-extracted groundwater. Currently 90% of its food is imported, but decreasing reliance on imports could exacerbate water scarcity. Tackling this involves costly decisions that affect stakeholders and considering financial, environmental and social factors. Proper decisions improve water and food security, as well as sustainability. However, economic analyses frequently overlook the true cost of water, contributing to high per capita water consumption in the Emirate.
Isle worked with our client to develop a model that took into account all relevant costs associated with water. These included direct, indirect and hidden costs, which allowed us to present a holistic view of the societal cost of potable and agricultural water. Following on from the model, we produced a report outlining the model’s principles and assumptions. We also issued a call to action informed by insights from the cost model.
Benefits of Approach/Innovation
- Provides holistic cost of water: The model includes 12 cost categories and takes account of the true cost of water. This includes often overlooked elements such as agriculture and socio-environmental impacts.
- Evidence based decision-making: The model allows for investment into a more sustainable source of water.
- Helps prioritize options: Knowing the true cost of water helps with decision making around the scalability and cost efficiency of available and emerging technologies.
- Drives informed policy change: Helps ensure water rights management for groundwater abstraction and licenses.
Specialist Services Involved:
- Expert data analysis: We identified, collected and analyzed data to classify a variety of different costs.
- Stakeholder engagement: Isle conducted workshops and interviews with key personnel to gather data and validate assumptions in the model.
- Comprehensive modeling: Our team developed a quantitative model which includes 12 cost categories. We also carried out a thorough Monte Carlo analysis to account for uncertainty.
Outcomes:
- Quantitative model developed: This model calculates indirect and intangible costs in economic terms alongside direct capital and running costs. A total of 12 cost categories are included in the model.
- Sourced alternative sustainable water supplies: Alternative sourcing emphasized atmospheric water generation (AWG) to understand the scalability and cost efficiencies of current and emerging technologies.
- Identified better options: The scenarios simulated showed how lowering reliance on importing food and growing more crops locally could minimize additional water demand.
Key Contacts:
For enquiries and further information, please contact Mufeed Hassan, Principal Consultant, Isle Utilities.