CREATING INCENTIVES FOR MORE EFFECTIVE WASTEWATER REUSE IN THE MIDDLE EAST AND NORTH AFRICA Marc Jeuland Working Paper 626 September 2011 This author thanks the Economic Research Forum in Egypt for supporting this work, and particularly Hala Abou-Ali. Thanks are also due to the anonymous reviewers of this paper’s initial concept as well as the three reviewers for the full paper. Send correspondence to: Marc Jeuland Sanford School of Public Policy and Duke Global Health Institute; Duke University
[email protected] First published in 2011 by The Economic Research Forum (ERF) 21 Al-Sad Al-Aaly Street Dokki, Giza Egypt www.erf.org.eg Copyright © The Economic Research Forum, 2011 All rights reserved. No part of this publication may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from the publisher. The findings, interpretations and conclusions expressed in this publication are entirely those of the author(s) and should not be attributed to the Economic Research Forum, members of its Board of Trustees, or its donors. Abstract The reuse of treated wastewater is often discussed as an attractive option for addressing water scarcity, yet systematic water recycling remains rare in many arid and semi-arid countries, for example in the Middle East and North Africa (MENA). This paper addresses how the economics of reuse may contribute to this paradox, emphasizing the role played by unresolved incentive problems with management of the externalities associated with wastewater discharges. A simple conceptual model with two users—one high-value (e.g.