The purpose of this book is to develop a general economic model which integrates the quantity and quality issues of water resource management and to provide, along with a detailed criticism of the policy instruments now in use, alternative proposals concerning the efficient allocation and distribution of water. In particular we treat water as a multi-product commodity where the market plays a major role in determining water quality-discriminant pricing and its value to the user. We examine the process of moving from administrative allocation and regulation to privatization of the water industry as the key element in promoting effective competition and in providing economic incentives for greater efficiency. Water quantity and quality, considered independently of each other, have been the subject of numerous studies during the last twenty years. Let us recall briefly the most outstanding among them. A variety of models have been constructed concerning the optimal scheduling and sequence of water-supply projects: dynamic programming for solving multi-bjective functions in water resource development; planning models for coordinating regional water-resource supply and demand, etc. Other studies have devised water-quality management models, including multi-period design of regional or municipal wastewater systems; cost-allocation methods to induce effluent dischargers to participate in regional water systems; models to predict the quality of effluent (in particular, whether it meets certain established standards); models for finding optimal waste-removal policies at each of the polluting sources, and so on.

In December 2002, a group of specialists on water resources from the United States and Iran met in Tunis, Tunisia, for an interacademy workshop on water resources management, conservation, and recycling. This was the fourth interacademy workshop on a variety of topics held in 2002, the first year of such workshops. Tunis was selected as the location for the workshop because the Tunisian experience in addressing water conservation issues was of interest to the participants from both the United States and Iran. This report includes the agenda for the workshop, all of the papers that were presented, and the list of site visits.