Cost�benefit analysis and efficient water allocation in Cyprus

The scarcity of water resources in both arid and temperate countries alike is one of the most pervasive natural resource allocation problems facing water users and policy-makers. In arid countries this problem is faced each day in the myriad of conflicts that surround its use.Water scarcity is a fact with which all countries have to become increasingly involved. Water scarcity occurs across many dimensions. First, there is growing demand for water in residential, industrial and agricultural sectors stemming largely from population and economic growth. Secondly, supply-side augmentation options have become increasingly constrained and restrictively costly in many countries. In combination, demand growth and supply-side interventions have stretched current water availability to its hydrological limits. In addition to these quantity constraints, the limits to the assimilative capacity of water resources for human and industrial waste have been reached in many places, and the quality of freshwater has been degraded (Winpenny, 1994).