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Tunisia ranks among the world’s most severely water-stressed countries, and the situation is exacerbated by the intersection of several factors, including climate change and geopolitical risk. This study seeks to assess the effects of climate vulnerability and geopolitical risk on total and sectoral water use in Tunisia while controlling for economic growth, trade openness, and urbanisation. The empirical investigation covers the period 1995-2022 and is based on the novel Dynamic Autoregressive-Distributed Lag Simulations (DYNARDL) approach. The main estimation results indicate that total water use, as well as water use for the agricultural and municipal sectors, increases with rising climate vulnerability and geopolitical risk in both the short- and long-run. Simultaneously, to capture the anticipated counterfactual shock to climate vulnerability on water use, simulations over the period 2022-2042 show that water use in Tunisia will significantly react to any change in climate vulnerability, ceteris paribus. The pathways that are useful for policy are highlighted and discussed in this study.
