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Groundwater resources are critically important for irrigated agriculture in Tunisia. However, excessive irrigation extractions where groundwater is slowly renewed are causing a widespread depletion of the aquifer systems, with the impacts of climate change expected to further exacerbate this problem. These circumstances call for the development of methodologies and analyses that can support the design of sustainable groundwater management policies. This paper presents a hydro-economic mathematical programming model that is used to evaluate the effects of different policy measures for reducing aquifer depletion in the Cap-Bon region of Tunisia. Three policies have been evaluated: a quota defining the maximum quantity of groundwater extractions, environmental taxation, and supply expansion with subsidized desalinated seawater. Overall, results highlight the economic and social tradeoffs among these different policy choices and the challenges facing the implementation of sustainable groundwater management in Tunisia. More specifically, results show the advantages of using subsidized desalinated seawater compared to the other two policy alternatives in terms of the value of agricultural production, farmers’ profits, and employment, despite of its sizeable budgetary burden.
