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Abstract

The Magdalena watershed in Colombia is the most densely populated and economically important region in the country. While Colombia is generally classified as a water-rich country, it is expected that water shortages will occur in the future without adequate planning and investments in water management infrastructures. Currently, even though all instruments required for an integrated water resource management are present in Colombia, they are employed independently from each other and thus not very efficient. To estimate the potential benefits of a more coordinated water management planning, especially in consideration of projected changes in water availability and demand in the near future, we developed a constrained welfare maximization model of the watershed (CAMARI). We ran the model with three different scenarios of future water availability, based on RCPs 2.6, 4.5 and 6.0, and with two planning modes: coordinated and uncoordinated. The results show that a coordinated planning of investments in water management infrastructures increases welfare by 2–18% over the next century in the Magdalena river basin, which corresponds to average annual savings from US$ 610 million to US$ 6.4 billion. Benefits increase as water availability decreases. Our results also show that water demand from the agricultural sector is projected to rise in future, which further underlines the necessity for robust governance mechanisms to keep conflicts between sectors to a minimum.