Economics of Water Saving Technologies in Jordan - Lessons Learned

Jordan is one of the most water-scarce countries in the world. With its population rapidly growing, the demand for water has increased and is straining the country’s already limited resources. The five-year USAID Water Innovation Technologies (WIT) Program used a market-based approach in Jordan to improve water use efficiency and water conservation in the agricultural sector, in communities, and in households.  

Among many lessons from the program are findings from one study on the Economics of Water Savings in Jordan for implementers and donors considering a market-based approach to water-saving projects who want to understand how to measure the cost-effectiveness. The study estimated the cost-effectiveness of investment in each WIT activity in terms of promoting the adoption of water-saving technologies by households, farmers and communities, as well as analyzing the motivation, costs, and benefits of adopting technologies and practices for both private (i.e., suppliers, farmers and households) and public actors (i.e., USAID and implementing partner Mercy Corps). 

Agricultural activities to support farmers included demonstration of water-saving technologies, an investment fund to cost-share irrigation equipment for farmers, and investments for suppliers to promote water-saving technologies by compensating them for each cubic meter of water saved by farmers. Household level activities included an investment fund for suppliers to expand their sales network to promote water-saving technologies, a loan fund for community based organizations that disbursed micro and small loans to households to buy water-saving technologies, social media marketing to raise public awareness, in addition to installing water-saving technologies in schools and communities.

Key lessons:

1. Funding water-saving projects in Jordan, particularly with a market based approach, may be less expensive than other alternatives;
2. Adopting water-saving technologies and practices often has a positive return on investment for the adopter even if they bear the full cost of the adoption.
3. Subsidizing water-saving technology adoption also seems to be more cost-effective than alternative based approaches (key for governments and donors).

Recommendations for those planning similar efforts in the future include:

• Be forward thinking to influence behavior - include an estimate of future water saving into calculations of water savings from a project.
• Consider businesses’ financial bottom line - efforts to increase on-farm water-saving techniques should include information on the potential and additional cost-savings for farmers, on electricity for example.
• Understand the context - for households in Jordan, this meant placing informational/ marketing messages in a religious context or working with religious organizations to do so.
• Be strategic with marketing, especially for techniques like rainwater harvesting systems that have longer terms to realize the benefits and are most appropriate for areas with higher average annual rainfall. 
• Inform program participants of all of the total costs up front to realize all of the potential water savings (i.e., do not forget the costs of regular maintenance).
• Consider discounted pricing or other measures to support adoption at the household level and focus on ones with the largest potential for water savings. 

Tips for making cost-effectiveness and return on investment analysis relevant for a project: 

• Establish cost categories and methods for assigning expenditures to these categories at the start of a project and use them consistently to accurately measure cost-effectiveness by activity.
• Standardize data collection and tracking methods and ensure consistency of terminology used across multiple data sets and organizations.

By Emma Mendez Rossell, former Program Management Specialist for the Water Innovation Technologies (WIT) Project, Mercy Corps International.

Related Resources:

• Impact on Groundwater in Jordan to Water Savings Technologies
• Jordan: Water Management Initiative